Calcutta High Court (Appellete Side)
Smt. Sumita Bhadra vs State Bank Of India And Others on 19 February, 2020
Author: Sabyasachi Bhattacharyya
Bench: Sabyasachi Bhattacharyya
In the High Court at Calcutta
Constitutional Writ Jurisdiction
Appellate Side
The Hon'ble Justice Sabyasachi Bhattacharyya
W.P. No. 22759(W) of 2019
Smt. Sumita Bhadra
Vs.
State Bank of India and others
For the petitioner : Mr. Ayan Banerjee,
Mr. Arijit Bhowmick,
Ms. Debasree Dhamali
For the respondent nos.1 to 3 : Mr. Subrata Kumar Sinha
Hearing concluded on : 11.02.2020
Judgment on : 19.02.2020
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Sabyasachi Bhattacharyya, J.:‐
1. The writ petitioner is the widow of late Wing Commander Anubrata Bhadra. Being entitled to withdraw pension from the respondent no.5 upon the demise of her husband, the writ petitioner, having a minor son at the time of such demise, started receiving family pension, the scale of which was revised from time to time.
2. On December 23, 1998, the petitioner received a letter from the erstwhile employer of her husband intimating her that the recommendation of the Fifth Pay Commission had been implemented, for which she was required to submit necessary forms for revision of family pension. The petitioner complied with all such formalities and accordingly respondent no.5 passed an order revising the pension in terms of the revised pay scale. Such disbursement was authorized by the petitioner to be paid through the respondent no.1‐bank. The bank treated such family pension as income from salary and regularly deducted TDS, although, according to the petitioner, family pension should have been treated as "income from other sources" under Section 194 of the Income Tax Act. Upon the petitioner making a request before the respondent no.4 to rectify such mistake, the petitioner was called to the said branch of the respondent no.1‐bank and was 3 handed over certain documents to be filled up and signed by her. The petitioner accordingly filled up such documents and subsequently discovered that one of those was a purported undertaking given by the petitioner, which was not brought to the knowledge of the petitioner at the juncture when she signed it.
3. On September 21, 2019, the petitioner received two e‐mails indicating that her pension account as well as savings account, containing Rs.50,000/‐ and Rs.5,20,000/‐ respectively, were put on hold in view of excess pension recovery. On the same date, the petitioner received an SMS intimating her that a pension account had been opened in her name and she was asked to visit the bank to furnish her life certificate and undertaking. The following day, the petitioner received another SMS to the effect that the life certificate furnished by her was successfully updated and pension would be released on the next processing date.
4. Subsequently, upon getting an e‐mail from the bank informing that a hold of Rs.1,20,000/‐ was put on her pension account, the petitioner accessed both her accounts online on September 27, 2019 and discovered that sums of Rs.1,30,000/‐ and Rs.5,20,000/‐ had been deducted respectively from the pension and savings accounts of the petitioner. No prior intimation was given to the petitioner before deducting such amounts.
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5. However, on September 24, 2019, the petitioner had received an SMS from the bank stating that upon request, the hold of Rs.50,000/‐ had been removed from her Account No.10527253143. The same was followed by another SMS dated September 25, 2019 informing about transfer of Rs.39,706/‐ to her pension account, which was significantly less than the amount she was receiving on monthly basis till August, 2019.
6. Upon calculation, the petitioner discovered that 33.33 percent of the pension amount received for the month of September had been deducted by way of recovery.
7. On September 27, 2019, the bank sent another SMS to the petitioner intimating that, upon request, the hold of Rs.1,20,000/‐ was removed from the Account No.10527253143. The petitioner alleges that she had never made any such request to the respondent‐bank.
8. Thereafter the petitioner served a legal notice upon the Manager of the respondent no.1‐bank indicating about such sums of Rs.1,30,000/‐ and Rs.5,20,000/‐ having been deducted from the accounts of the petitioner without her permission or prior intimation. A further amount of Rs.19,852/‐ was deducted from the pension of the petitioner on account of recovery, which was almost 33.33 percent of the total pension amount.
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9. On October 24, 2019, the petitioner received a communication dated September 24, 2019 issued by the respondent no.2, informing that, from September 24, 2012 to August 31, 2019, excess payments were made to the petitioner at original pensioner's rate instead of family pensioner rate. Accordingly, it was mentioned in the communication, a sum of Rs.26,05,664/‐ had been paid in excess and was required to be recovered.
10. The petitioner says that she had worked as a teacher in a private school but has already retired from such service and has no other source of income apart from the family pension received by her. The standard of living of the petitioner has been commensurate with the amount of family pension received by her and the petitioner has made future economic plans based on such income. In the event the petitioner is forced to pay back the huge amount of Rs.26,00,000/‐ approximately, the petitioner will be financially ruined. Such deduction would be all the more unjust in view of the petitioner being a senior citizen and a widow, who is entirely dependent on her family pension and there being no fault on the part of the petitioner in such alleged extra amount having been deposited in her account. Already a total sum of Rs.6,50,000/‐ has been deducted by the respondent‐bank from the accounts of the petitioner and the respondent‐bank is further seeking to recover a total sum of Rs.26,00,000/‐ approximately on the ground of excess payment.
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11. Learned counsel for the petitioner relies on the landmark judgment of State of Punjab and others vs. Rafiq Masih (White Washer) and others, reported at (2015) 4 SCC 334, wherein the Supreme Court laid down the parameters of fact situations, wherein employees, who are beneficiaries of wrongful monetary gains at the hands of the employer, may not be compelled to refund the same. After considering all the preceding judgments in the field, the Supreme Court indicated, in paragraph no.18 of the judgment, that although it was not possible to postulate all situations of hardships which would govern employees on the issue of recovery, where payments have mistakenly been made by the employer in excess of their entitlement, but, as a ready reference, certain situations were summarized, wherein recoveries by the employers would be impermissible in law:
12. The said paragraph is reproduced hereinbelow:
"18. 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 hereinabove, we may, as a ready reference, summarise the following few situations, wherein recoveries by the employers, would be impermissible in law:
(i) Recovery from the employees belonging to Class III and Class IV service (or Group C and Group D service).7
(ii) Recovery from the retired employees, or the employees who are due to retire within one year, of the order of recovery.
(iii) Recovery from the 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 cases, 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. It is thus submitted that, since the petitioner falls squarely within the categories
(ii) and (iii) above as well as, to some extent, (v) thereof, the respondents acted de hors the law in issuing the memo dated September 24, 2019, being annexure P‐10 at page 41 of the writ petition, and in deducting the total amount of Rs.6,50,000/‐ from the two accounts of the petitioner, bearing Account No.10527253143 and Account No.10527200418, maintained with the respondent no.4‐Bank.
14. The writ petition has been filed primarily to rescind and/or cancel the memo dated September 24, 2019 and for getting refund of the sum of Rs.6,50,000/‐ and/or any subsequent amount, deducted from the said two accounts. 8
15. Learned counsel for the petitioner further submits that there was no fault on the part of the petitioner in such alleged excess payments being made and the petitioner was in no way responsible for such payments, even if those were actually in excess. Hence, it is argued, the respondents acted without jurisdiction in deducting the said amounts and thus, the prayers made in the writ petition ought to be granted.
16. Learned counsel appearing for the respondents argues, by handing over a copy of a letter of undertaking allegedly given by the petitioner, that the petitioner herself had given an undertaking to refund or make good to the bank any amount to which she was not entitled or any excess amount which might be credited to her account over which she was not entitled, which also bound her heirs, executors and administrators. It is thus argued on behalf of the respondents that, in view of the petitioner's undertaking, the principle of Rafiq Masih (supra) does not govern her.
17. In this regard, learned counsel for the respondents cites another judgment of the Supreme Court, reported at (2016) 14 SCC 267 [High Court of Punjab & Haryana & Ors. Vs. Jagdev Singh ], wherein a two‐Judge bench, equivalent in strength to Rafiq Masih (supra), held that the principle enunciated in paragraph 18(ii) in Rafiq Masih (supra) cannot apply to a situation such as the case which fell for 9 consideration before the subsequent division bench. In that case, the officer to whom the payment was made in the first instance was clearly placed on notice that any payment found to have been made in excess would be required to be refunded. Since the officer had furnished an undertaking while opting for the revised pay scale, it was held that he was bound by such undertaking.
18. Learned counsel for the respondents also relies on Chandi Prasad Uniyal and Ors. Vs. State of Uttarakhand and Ors., reported at AIR 2012 SC 2951, wherein another bench of similar strength as those which authored the other two cited judgments of the Supreme Court, had held that any amount paid/received without authority in law can always be recovered, barring few exceptions of extreme hardships, but not as a matter of right. In such situations, it was held, law implied an obligation on the payee to repay the money, otherwise it would amount to unjust enrichment. Recovery of excess paid public money cannot be limited only to cases of fraud or misrepresentation but also applied to other cases such as wrong pay fixation etc.
19. Relying on such judgments, as well as the undertaking filed purportedly by the petitioner, learned counsel for the respondents contends that the bank was justified in issuing the memo‐in‐question and deducting the amounts from the accounts of the petitioner.
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20. The petitioner, in reply, relies on a co‐ordinate Bench judgment of this Court, reported at (2017) 2 Cal LJ 177 [Sujan Kumar Ghosh v. The State of West Bengal & Others] , which considered all the relevant judgments in the field and held that Jagdev Singh (supra) was rendered under Article 141 in a fact situation where the employee exercised his undertaking for adjustment of excess payment made to Judicial Officers following the notification of the Revised Pay Rules, but in the said case at hand, the facts were different inasmuch as no such recommended Pay Commission (Shetty Commission) had ever been accepted by the petitioner. As such, ultimately the criteria laid down in Rafiq Masih (supra) was followed.
21. While distinguishing Jagdev Singh (supra), learned counsel for the petitioner further argues that clause (iii) of Paragraph no. 18 of Rafiq Masih (supra) was not dealt with therein. As such, the proposition laid down in Jagdev Singh (supra) was only a precedent on clause (ii), which was discussed in the said judgment.
22. Learned counsel for the petitioner, in reply, next argues that the undertaking relied on by the Respondent‐Bank should be put to the test of inequality of bargaining power between the parties for ascertaining its reasonableness or fairness. For such proposition, learned counsel relies on the judgment of Central Inland Water Transport Corporation Limited and Another v. Brojo Nath Ganguly and Another, reported at (1986) 3 SCC 156.
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23. In answer to the reply, learned counsel for the Respondent‐Bank seeks to distinguish Rafiq Masih (supra) on the premise that the same related to Scale III and Scale IV payments and pertained to service, and is not a precedent in respect of pension. Moreover, it is argued, clause (iii) of Paragraph no. 18 of the said judgment has to be read in the context of clause (ii), which was dealt with in Jagdev Singh (supra). Clause (v), on the other hand, is general in its application and does not apply to the present case.
24. Learned counsel for the Respondent‐Bank further submits that, in case of pension accounts, generally an undertaking is taken only once and is applicable to every instance of payment. It would be absurd, it is submitted, if for every payment a separate undertaking had to be taken. Hence, the undertaking given by the petitioner is general and binds the petitioner regarding all the payments made.
25. It is argued that since the petitioner is not illiterate and has not been able to factually substantiate that she was misled into giving the undertaking cited by the respondent‐bank, it can easily be assumed that the said undertaking was consciously given by the petitioner.
26. Upon hearing both sides, the undertaking purportedly given by the petitioner assumes importance and its scope is required to be explored before proceeding 12 further. A perusal of the same shows that it was given by the petitioner to the Assistant General Manager, State Bank of India, AE Market Branch at Salt Lake and was captioned "Letter of undertaking to be obtained from Pensioners whose Pension is paid by the Bank under the Scheme for Payment of Pension by Public Sector Banks".
27. Learned counsel for the Respondent‐Bank, although in reply, produces a new document, being a purported communication dated March 17, 2016 by the Reserve Bank of India to all agency banks, stipulating the guidelines for recovery of excess payments made to pensioners.
28. The undertaking was given in consideration of the State Bank of India having agreed to the request of the petitioner to credit to her savings banks/current account no.10527253143 in her single name the amount of pension, payable to her from time to time by the Government of India, as it falls due under the scheme for Payment of Central Government Pensioners/State Government Pensioners by Public Sector Banks.
29. As reflected from such document, the petitioner apparently agreed and undertook to refund or make good to the bank any amount to which she was not entitled or any excess amount which might be credited to her account over which she was not entitled, which would bind her heirs, executors and administrators. 13 In the same sentence, an agreement and undertaking of the petitioner was recorded, to indemnify the bank against any loss, costs, charges/damages and expenses suffered/incurred by the bank in so crediting the pension of the petitioner to her account under the scheme and to forthwith pay the same to the bank and also irrevocably authorize the bank to recover the amount in respect thereof by debiting her said accounts or any other deposits belonging to her in the hands of the bank.
30. The said document, if read in the light of the settled principle of ejusdem generis, would link the payment of excess amount, which the petitioner undertook to refund, to any loss, costs, charges/damages and expenses suffered or incurred by the bank in crediting the petitioner's pension under the scheme.
31. On the face of it, the language of the undertaking indicated that there had to be a hand of the petitioner in such loss, costs, charges/damages and expenses being suffered or incurred by the bank.
32. The undertaking, merely given to credit the bank accounts of the petitioner with the amount of pension, could not be taken in a perspective wider than that for which it was meant.
33. The only authority given by the petitioner to the bank was to credit her account with the pension. In the absence of any complaint or grievance as to over‐ 14 payment being raised on the part of the ex‐employer of the deceased husband of the petitioner, the petitioner could not be saddled with an undertaking which went beyond the scope of the authority given by her to the bank, which was merely to credit the account with the amount of pension.
34. As such, even on a plain and harmonious reading, it has to be construed that the undertaking only covers situations for which the petitioner was responsible in any manner and could not cover the mistakes of the bank itself.
35. In any event, applying the principle of Tort regarding contributory negligence, in the absence of any fault or negligence on the part of the petitioner, the petitioner could not be liable for excess payment made by the bank to her account.
36. The authority given by the petitioner to the bank was merely to credit her accounts and as such, the undertaking itself, being beyond the scope of the authority, was bad in the eye of law.
37. It cannot but be assumed that the bank, being the immediate source of disbursal of the pension, was in a dominant position, even if such undertaking was treated to be a contract and as such, was in a position to compel the petitioner to sign such undertaking, which would tantamount to a compulsion akin to coercion. The petitioner's contention, that she was made to sign the documents and only later discovered one of those to be an undertaking, is an absolutely plausible 15 version in the circumstances. Even without going to such an extent, applying the principle of reasonableness and fairness as laid down in Central Inland Water Transport Corporation v. Brojo Nath Ganguly (supra), there was obvious inequality of bargaining power between the Bank, an institution and the petitioner, an individual, who had no other option but to accede to the undertaking proposed by the Bank. As such, the said undertaking has to be held to be de hors the law, having failed the test of reasonableness and fairness.
38. Even apart from the aforesaid observations, the bank's action in issuing the impugned memorandum and deducting the amounts were patently illegal.
39. The judgment of Jagdev Singh (supra) was on a different footing altogether and did not lay down a proposition which is applicable to the instant case. It is well‐ settled that a judgment is a precedent for the facts and circumstances of the said case only and cannot lay down a blanket law governing all cases under the Sun.
40. A thorough perusal of Jagdev Singh (supra) shows that, in the said case, the acceptance of the revised pay scale itself was coupled with an undertaking by the employee himself to the effect that he would be liable to refund any excess payment made to him. The context was that the employee therein had subjected himself to the benefits of the revised pay scale on condition that if the rules were revised subsequently, any excess payment would be refunded by the employee. 16 The condition of refund was an integral and inalienable part of the acceptance of the revised pay scale itself and the two could not be isolated from each other. As such, the principle of Rafiq Masih (supra) was held to be inapplicable therein. The said proposition was made clear in paragraph no.9 of Jagdev Singh (supra) which recorded, as a ground for passing the judgment, that while opting for the benefit of the revised pay scale, the respondent therein was clearly on notice of the fact that a future re‐fixation or revision may warrant an adjustment of the excess payment made, if any.
41. In the present case, as distinguished from Jagdev Singh (supra), the original employee, being the deceased husband of the petitioner, had not accepted any such revised pay scale and there arose no question of his accepting the condition to refund such excess on a further revision of the pay scale.
42. As such, the charter of the bank was merely to credit the pension, disbursed by the employer of the deceased husband of the petitioner, to the petitioner's account. The preceding expression of the so‐called undertaking shows that the same was given merely in consideration of the State Bank of India having agreed at her request to credit her account with the amount of pension.
43. Thus, the said authority was restricted to crediting the account and the bank was not the employer of the deceased husband of the petitioner, only who could have 17 a direct hand in demanding such an undertaking from the petitioner and/or to deduct excess amounts.
44. Hence, as opposed to Jagdev Singh (supra), in the present case the undertaking was not entered into by the employee as a condition of the acceptance of the pension and was, thus, not an integral part of the employment package of the deceased husband of the petitioner. Since the right of the petitioner to get pension follows directly from the terms of the employment, no undertaking could be taken from her which restricts her legal right to get such pension without any fault on her part.
45. Moreover, the language of the undertaking unerringly pointed to such refund being conditional upon any loss, costs, charges/damages and expenses suffered or incurred by the bank, which language indicates that the petitioner had to have a hand behind such loss or damages. Since, in the present case, there was no fault on the part of the petitioner but it was entirely the mistake of the bank, no such undertaking could be enforced against the petitioner.
46. Moreover, such undertaking, being de hors the law laid down in Rafiq Masih (supra), was bad in law and not enforceable against the petitioner.
47. The other point of distinction with Jagdev Singh (supra) is that, in the said judgment, the Supreme Court laid down the proposition that clause (ii) of 18 paragraph no. 18 of Rafiq Masih (supra) cannot apply to a situation where the employee was clearly placed on notice at the time of opting for the revised pay scale that he had to refund any excess payment. In such a scenario, it was held that the employee was bound by such undertaking. There are two clear distinctions from such proposition in the present case:
(a) The petitioner is covered not by clause (ii) alone but by clauses
(iii) and (v) of paragraph no.18 of Rafiq Masih (supra) as well.
Since the judgment of Jagdev Singh (supra) laid down the proposition‐in‐question only on the application of clause (ii), the same cannot be said to cover clauses (iii) and (v) also, which were relevant clauses applicable to the present petitioner;
(b) In view of the fact that there was no undertaking given by the original employee as a condition for such entitlement to pension as the petitioner claims, the proposition laid down in Jagdev Singh (supra) does not apply to the present case at all.
48. As far as Chandi Prasad Uniyal (supra) is concerned, the same was dealt with in Rafiq Masih (supra) specifically and cannot be relied on to distinguish Rafiq Masih (supra), since the latter judgment took into consideration and interpreted Chandi Prasad Uniyal (supra).
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49. Hence, none of the cases cited by the respondents supports the contention of the respondents.
50. On the contrary, the principle laid down in Rafiq Masih (supra) squarely applies to the present case, more so since the bank was on a lesser footing than the disbursing authority, that is, the employer of the deceased husband of the petitioner, as far as deciding on over‐payment and/or deductions is concerned.
51. Pension is an incidence of employment and is a logical extension of the initial terms of employment. In the present case, as opposed to Jagdev Singh (supra), no undertaking of refund in case of excess payment was given by the original employee, the husband of the petitioner, let alone such undertaking being a condition of acceptance of a higher pay scale. Hence, by virtue of a subsequent 'undertaking' given by the petitioner to the Bank for the limited purpose of channelizing the pension through the Respondent‐Bank, the original terms of the contract of employment could not be re‐written. Thus, the said undertaking could not be binding on the petitioner, being de hors the law and the contract of employment itself.
52. If seen in proper perspective, apart from the aforesaid reasons, the impugned memorandum dated September 24, 2019 as well as the deduction made by the bank were, in any event, time‐barred as a money claim, at least as far as the 20 payments made from September 24, 2012 to August 31, 2016 were concerned, being beyond three years from when such excess payments were made. In such view of the matter, the deduction for the said period, even without going into the principles of Rafiq Masih (supra) and Jagdev Singh (supra), was not tenable in the eye of law.
53. Even if the communication by the Reserve Bank of India, dated March 17, 2016, is taken into consideration (although such scope is extremely limited since the same was not relied upon at the time of the initial reply of the Respondent‐Bank), clause a) thereof says that as soon as the excess/wrong payment made to a pensioner comes to the notice of the paying branch, it should adjust the same against the amount standing to the credit of the pensioner's account. However, such clause highlights the gross negligence on the part of the Respondent‐Bank, since the alleged excess payment was detected by the Bank for the first time in the year 2019, that is, seven long years after it commenced in the year 2012.
54. That apart, the said circular is squarely against the law laid down in Rafiq Masih (supra), which renders it bad in the eye of law.
55. In view of the aforesaid reasons, the respondents acted illegally and de hors the law in issuing the notice dated September 24, 2019 and in deducting the total amount of Rs.6,50,000/‐ from the two bank accounts of the petitioner, and 21 thereafter further amounts from the monthly pension of the petitioner as mentioned in the writ petition.
56. Accordingly, W.P. No.22759(W) of 2019 is allowed on contest, thereby setting aside the memorandum dated September 24, 2019 issued by the respondents, being annexure P‐10, at page 41, of the instant writ petition and directing the respondents to refund the amount of Rs.6,50,000/‐ , as well as any other subsequent amount of money, deducted illegally from the petitioner's Account No.10527253143 and Account No.10527200418 as excess payment, immediately to the said accounts in the proportions in which they were deducted from such accounts, latest within a fortnight from date, by reversing the deductions and depositing back such amounts to the accounts of the petitioner held with the respondent no. 4‐bank.
57. The respondents are further restrained from deducting any further amount from the pension being credited regularly to the account of the petitioner, held with the respondent no.1‐bank, as deduction due to alleged excess payment having been made.
58. There will be no order as to costs.
59. Urgent certified website copies of this order, if applied for, be made available to the parties upon compliance with the requisite formalities. 22 ( Sabyasachi Bhattacharyya, J. )