Central Administrative Tribunal - Delhi
Sanjay Kumar vs Railway on 11 March, 2025
1
Item No.52/ C-V O.A. No.2634/2023
Central Administrative Tribunal
Principal Bench: New Delhi
O.A. No.2634/2023
This the 11th day of March, 2025
Hon'ble Mr. Manish Garg, Member (J)
Hon'ble Dr. Anand S Khati, Member (A)
Sanjay Kumar, Aged about 60 years,
S/o Sh. Late Ravi Kumar
Posted as Sr. ISA/HQ,
ADD-Head Office,
Northern Railway,
Head Quarter, Baroda House,
New Delhi - 110001
...Applicant
(By Advocate : Mr. S K Singh)
Versus
1. Union of India
Through General Manager,
Northern Railway, Baroda House,
New Delhi - 110001
2. The Principle Financial Advisor
Northern Railway, Baroda House,
New Delhi - 110001
...Respondents
(By Advocate : Mr. Dilbag Singh)
2
Item No.52/ C-V O.A. No.2634/2023
ORDER (ORAL)
By Hon'ble Mr. Manish Garg, Member (J) By way of the present OA, the applicant seeks the following relief:-
"a) That Hon'ble Tribunal may graciously be pleased to quash/set aside impugned order dated 16.08.2023 passed by the respondents i.e. AFA Administration Head Quarter, for recoveries of the excess payment from the recovery of the settlement dues of the retirement of the applicant, in the interest of justice.
b) Any other relief which the Hon'ble Tribunal deem fit and proper may also be granted to the applicant along with the costs of litigation."
2. Brief facts of the case as narrated by learned counsel for the applicant are as under:-
2.1 Learned counsel for the applicant submits that the applicant retired on 30.08.2023 and since then he has not been paid any amount out of his gratuity payment of Rs.20 lacs. He states that on 31.08.2023, the respondents informed the applicant that an amount of Rs.4,27,793/-
has been worked out, which will be recovered from the retirement dues paid to the him. Learned counsel states that the applicant is not only seeking refund of the said amount recovered from him but also seeking release of the remaining Rs.15,72,207/- which is withheld gratuity amount payable to him from due date along with interest.
3Item No.52/ C-V O.A. No.2634/2023 2.2 Learned counsel further states that on 04.08.2023, under the apprehension that the recovery would be made, he represented before the respondents that they should not recover any amount from his pensionary benefits but without taking any cognizance of the same, they issued the said recovery letter dated 31.08.2023 on the very date of his retirement. He strengthens his argument invoking the Judgments passed by the Hon'ble Apex Court in the matter of the State of Punjab & Ors. vs. Rafiq Masih (white washer) & Ors., AIR 2015 (4) SCC 334 and in the matter of Thomas Daniel vs. State of Kerala & Ors., Civil Appeal No.7115/2010. He also draws attention to Clause 15 (1A) of Railway Services (Pension) Rules-1993 which reads as under:-
"15. Recovery and adjustment of Government or railway dues from pensionary benefits-(1) For the dues other than the dues pertaining to occupation of Government or Railway accommodation, the Head of Office shall take steps to assess the dues "one year" before the date on which a railway servant is due to retire on superannuation.
(1A) The assessment of Government or Railway dues in sub-rule (1) shall be completed by the Head of Office eight months prior to the date of retirement of the railway servant."
3. Per contra, Learned counsel for the respondens vehemently opposes the grant of relief and reiterates the arguments made in the counter affidavit. He draws our attention to Order dated 16.11.2018 passed in OA 4 Item No.52/ C-V O.A. No.2634/2023 No.3791/2015. The relevant portion of the same reads as under:-
"9. In the case of High Court of Punjab and Haryana and others vs. Jagdev Singh in Civil Appeal No.3500/2006 decided on 29.7.2016, the Hon'ble Apex Court held as follows:-
"9 The submission of the Respondent, which found favour with the High Court, was that a payment which has been made in excess cannot be recovered from an employee who has retired from the service of the state. This, in our view, will have no application to a situation such as the present where an undertaking was specifically furnished by the officer at the time when his pay was initially revised accepting that any payment found to have been made in excess would be liable to be adjusted. While opting for the benefit of the revised pay scale, the Respondent was clearly on notice of the fact that a future re- fixation or revision may warrant an adjustment of the excess payment, if any, made.
10 In State of Punjab & Ors etc. vs. Rafiq Masih (White Washer) etc., (2015) 4 SCC 334, this Court held that while it is not possible to postulate all situations of hardship where payments have mistakenly been made by an employer, in the following situations, a recovery by the employer 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.5
Item No.52/ C-V O.A. No.2634/2023
(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).
11 The principle enunciated in proposition
(ii) above cannot apply to a situation such as in the present case. In the present 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. The officer furnished an undertaking while opting for the revised pay scale. He is bound by the undertaking. 12 For these reasons, the judgment of the High Court which set aside the action for recovery is unsustainable. However, we are of the view that the recovery should be made in reasonable instalments. We direct that the recovery be made in equated monthly instalments spread over a period of two years.
13 The judgment of the High Court is accordingly set aside. The Civil Appeal shall stand allowed in the above terms. There shall be no order as to costs."
10. From the above amply clear that in view of the judgment of the Hon'ble Supreme Court in the case of Jagdiv Singh (Supra), the said recovery is permissible and hence, the grounds taken by the applicant have no force in law.
11. In view of the above and for the foregoing reasons, the present is liable to be dismissed and the same is accordingly dismissed. There shall be no order as to costs."
6Item No.52/ C-V O.A. No.2634/2023
8. In view of the above facts and circumstances, this Court does not find any merit in the prayer that the impugned order dated 11.9.2015 be set aside. The OM dated 6.2.2014 which has been sought to be challenged is found to be in accordance with the provisions of CCS (Pension) Rules and revision of pension has been done as per the said provisions. Further in view of the judgment of the Hon'ble Supreme Court in Jagdev Singh's case (supra), this Court does not find any merit in this case. Accordingly, the present OA is dismissed. There shall be no order as to costs."
3.1 Learned counsel further places reliance upon the Judgment dated 29.07.2016 of the Hon'ble Apex Court passed in the matter of High Court of Punjab & Haryana & Ors. vs. Jagdev Singh, rendered in Civil Appeal No.3500/2006. The relevant portion of the same reads as under:-
"10. In State of Punjab & Ors etc. vs. Rafiq Masih (White Washer) etc. this Court held that while it is not possible to postulate all situations of hardship where payments have mistakenly been made by an employer, in the following situations, a recovery by the employer 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 7 Item No.52/ C-V O.A. No.2634/2023 equitable balance of the employer's right to recover."
(emphasis supplied)
11. The principle enunciated in proposition (ii) above cannot apply to a situation such as in the present case. In the present 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. The officer furnished an undertaking while opting for the revised pay scale. He is bound by the undertaking.
12. For these reasons, the judgment of the High Court which set aside the action for recovery is unsustainable. However, we are of the view that the recovery should be made in reasonable instalments. We direct that the recovery be made in equated monthly instalments spread over a period of two years.
13. The judgment of the High Court is accordingly set aside. The Civil Appeal shall stand allowed in the above terms. There shall be no order as to costs."
3.2 Learned counsel for the respondents further places reliance on another Judgment dated 17.08.2012 passed by the Hon'ble Apex Court in the matter of Chandi Prasad Uniyal & Ors. vs. State of Uttarakhand & Ors., rendered in Civil Appeal No.5899/2012.
3.3 Learned counsel further relies upon Rule 71 (3) (b) of CCS (Pension) Rules, 1972 regarding recovery and adjustment of Government dues, which reads as under:-
"(b) dues other than those pertaining to Government accommodation, namely, balance of house building or conveyance or any other advance, overpayment of pay and allowances or leave salary and arrears of income tax deductible at source under the Income Tax Act, 1961 (43 of 1961)."8
Item No.52/ C-V O.A. No.2634/2023 3.4 Learned counsel for the respondent further submits that in terms of para 4(ii) of Rule 15 of Railway Services (Pension) Rules 1993 "Recovery of losses specified in sub clause (a) of Clause (I) of this sub rule shall be made subject to the condition laid down in Rule 8 being satisfied from recurring pensions and also commuted value thereof, which are governed by the Pension Act, 1871 (23 of 1871), A recovery on account of item (a) of sub para (1) which cannot be made in terms of Rule 8 and any recovery on account of sub clauses items (b} and (c) of clause (1) that cannot be made from these even with the consent of the railway servant the same shall be recovered from retirement, death, terminal or service gratuity which are not subject to the Pension Act 1871 (23 of 1871). It is permissible to make recovery of Government dues from the retirement, death, terminal or service gratuity even without obtaining employee's consent or without obtaining the consent of the member of his family in the case of a deceased railway servant." Concluding his arguments, he further relies upon the undertaking given by the applicant at relevant time.
4. We have heard learned counsel for the both parties and perused the material available on record. It is 9 Item No.52/ C-V O.A. No.2634/2023 admitted position that assessment of dues if any was made within one month prior to the date of retirement and without any show cause notice prior to one month from the retirement. It is also admitted that no departmental action was taken qua the overpayment which has been made to the applicant. Para (1A) of Rule 15 of Railway Services (Pension) Rules 1993 contemplates that "The assessment of Government or Railway dues in sub-rule (1) shall be completed by the Head of Office eight months prior to the date of retirement of the railway servant." In the present case, the said action has not been taken. We are also fortify by the decision taken in the case of Inder Dutt Sharma v. Govt. of NCT Delhi & ors, O.A. No.237/2022 on 20.10.2022. The relevant paragraph of the same reads as under:-
"9. On perusal of the records of the case as well as the facts and circumstances and hearing arguments of counsels for the parties, it is seen from the records, the matter is squarely covered by Rafiq Masih (white washer) followed by recent judgment of Hon'ble Apex Court in Thomas Daniel vs State Of Kerala on 2 May, 2022 and further it is also seen from the case of High Court of Kerala in State of Kerala; Director Of General Education; Deputy Director of Education Vs. P V Priya D/o Prabhakaran on 28 June, 2021.
"15. The Division Bench of this Court in the case in State of Kerala & Others v. Vinod Kumar (2020 (4) KerLT 230] in paragraph No.7 thereof has considered the effect of Jagdev Singh's case (supra) on the judgment in White Washer's case (supra). The Division Bench of this Court in Vinod 10 Item No.52/ C-V O.A. No.2634/2023 Kumar's case (supra) has held in paragraph No.7 thereof as follows:-
"7. In the light of the contentions raised before us, it is necessary to consider the law laid down in Jagdev Singh and to see whether this later judgment of the Supreme Court makes a complete departure from the law laid down in Rafiq Masih. In Jagdev Singh, pay revision benefits were extended to a judicial officer (the employee concerned) from time to time. During each of these occasions, as per per the rules applicable to him, he had undertaken to refund any excess payment that may be made. Following the revision of pay scales upon implementation of the First National Judicial Pay Commission ('Shetty Commission') recommendations, the pay of the officer was again revised. The officer was compulsorily retired from service, on January 7, 2002. In February 2004 proceedings for recovery of payments made in excess were initiated against him. On his writ petition, the High Court came to the conclusion that any excess payment made to him prior to his retirement could not be recovered, there being no fraud or misrepresentation on his part. The judgment of the High Court was reversed by the Supreme Court, on a short ground which we will notice after setting out the law laid down in Rafiq Masih. In Rafiq Masih the Supreme Court had, in paragraph 18 of the judgment, observed as follows:-
"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).
(ii) Recovery from the retired employees, or the employees who are due to retire within one year, of the order of recovery.11
Item No.52/ C-V O.A. No.2634/2023
(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 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."
After noticing the categories of situations set out as (i) to (v) in paragraph 18 of Rafiq Masih, the Supreme Court in Jagdev Singh held in paragraph 11 as follows:-
"11. The principle enunciated in Proposition (ii) above cannot apply to a situation such as in the present case. In the present 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. The officer furnished an undertaking while opting for the revised pay scale. He is bound by the undertaking." On a reading of both Rafiq Masih and Jagdev Singh, it is difficult for us to accept the contention of the learned Government Pleader that Jagdev Singh is a complete departure from the principles laid down in Rafiq Masih. From a reading of paragraphs 10 and 11 of Jagdev Singh, it appears to us that the Supreme Court had only clarified that in the case of recovery from retired employees or employees who are due to retire within one year of the order of recovery, there would be no bar in ordering recovery, if the employee concerned had executed an undertaking agreeing to refund any excess payment. We cannot read Jagdev Singh as having laid down the proposition that in every case where there is an undertaking as aforesaid, recovery can be ordered from the employee concerned whatever be the point of time that such payment was made. We cannot overlook the fact that there is not even a suggestion in Jagdev 12 Item No.52/ C-V O.A. No.2634/2023 Singh that in the event of there being an undertaking to refund excess pay, none of the situations envisaged as items (i) to (v) of Rafiq Masih can be pressed into service."
16. It can thus be seen that the Apex Court in Jagdev Singh's case (supra) has not interfered with the directions contained in para No.18 of the judgment in White Washer's case (supra) regarding clauses (i), (iii), (iv) & (v). The sole modification made in the Jagdev Singh's case (supra) was in relation to clause (ii) of the directions issued in paragraph No.18 of White Washer's case (supra).
17. Taking note of the abovesaid extenuating circumstances in this case, we are of the view that the Tribunal was fully justified to hold that if the recovery of the excess pay made as per Anx.A8, as permitted in Anx.A12, then the same would be highly harsh, oppressive and iniquitous to such an extent that it would far outweigh the equitable balance of the employer's right to recover. There cannot be any doubt that the original applicant has not contributed to, in any manner, for the abovesaid error in the initial appointment orders. The applicant has categorically and clearly disclosed all the details of her qualifications and work experience and if the authorities concerned had applied their mind, then the mistake as the one which occurred in Anx.A5, would not have happened. All throughout the applicant was under the bona- fide belief that it was a special benefit conferred in her favour by the exercise of discretion by the Government and that too, at the cabinet level and therefore, recovery of the said excess pay for the period prior to the impugned order will be harsh and iniquitous.
However, we make it clear that the pay of the applicant will stand regulated on the basis of the impugned order with prospective effect. We make it clear that we are only affirming the directions and orders passed by the Tribunal especially in the matter of interdiction with the excess pay paid to the applicant. In other words, nо interference is called for with the verdict of the Tribunal."
10. Further distinction has also been drawn in judgment passed by Hon'ble High Court of Bombay 13 Item No.52/ C-V O.A. No.2634/2023 in State of Maharashtra & Ors. Vs. Rekha Vijay Dubey: Sitaram Mamtaji Pote: Shashikant K Chinchkar dated 24.09.2021. (supra)
11. In view of the aforesaid submissions made by both the parties, the OA deserves to be allowed more particularly being a retired employee without any show cause notice; no recovery could have been made. Respondents are directed to refund the amount already recovered i.e. 3,98,909/- which has been wrongly adjusted against the gratuity, contrary to the aforesaid proposition of law within a period of two months from the date of receipt of certified copy of this order, failing which the applicant shall also be entitled to the interest on GPF rate till the date of actual payment. OA is allowed to the aforesaid extent. No order as to costs."
5. We further observe that the re-fixation was carried out through the impugned order dated 16.08.2023, which is more than twelve years after the actual fixation and in the month of retirement.
6. In view of the aforesaid facts and circumstances, we hereby quash and set aside the impugned order dated 16.08.2023. The respondents are directed to restore the earlier pay fixation order and release the gratuity so withheld within a period of three months from the date of receipt of a certified copy of this Order. The applicant shall be entitled for interest at the GPF rate on the delayed payments.
7. The OA is allowed in the aforesaid terms.
14Item No.52/ C-V O.A. No.2634/2023
8. Pending MAs, if any, shall also stand disposed of accordingly.
9. No order as to costs.
(Dr. Anand S Khati) (Manish Garg)
Member (A) Member (J)
/sm/