Central Administrative Tribunal - Ernakulam
N Devadasan vs M/O Shipping on 9 February, 2024
CENTRAL ADMINISTRATIVE TRIBUNAL
ERNAKULAM BENCH
Original Application No.180/01091/2016
Friday, this the 9th day of February, 2024.
CORAM:
HON'BLE Mr. JUSTICE K.HARIPAL, JUDICIAL MEMBER
HON'BLE Mr. K.V.EAPEN, ADMINISTRATIVE MEMBER
N. Devadasan, S/o Late Kanarakutty, aged 60 years, Retired
Assistant Engineer (Electrical), O/o Assistant Engineer,
Andaman Lakshadweep Harbor Works, Mangalore,
residing at 'Naranoth', Parambil Bazar, Parambil PO,
Kuruvattur, Kozhikode- 12
- Applicant
[By Advocate: Mr.R.Sreeraj]
Versus
1. Union of India, represented by its Secretary to the
Government of India, Ministry of Shipping, Road Transport
& Highways, New Delhi-110 001
2. The Chief Engineer & Administrator, Andaman
Lakshadweep Harbour Works, Portblair-744 101.
3. The Deputy Chief Engineer, Andaman Lakshadweep
Harbour Works, Kavaratti-682 555.
- Respondents
[By Advocate: Mrs. O.M.Shalina, SCGSC]
The application having been heard on 08.12.2023, the Tribunal
on 09.02.2024 delivered the following:
O.A No.1091/2016 2
ORDER
Justice K.Haripal Applicant is a former Assistant Engineer(Electrical) retired from Andaman Lakshadweep Harbour Works, ALHW for short, Mangalore, presently living in Kozhikode. He had commenced service in ALHW as Overseer under the Work Charged Establishment in July 1980, was appointed as Engineering Assistant, re-designated as Junior Engineer under the regular establishment. Later, he was promoted as Inspector of Works. While so, in February 1996, a Cadre Restructuring Committee was constituted for ALHW. The committee decided to abolish the post of Inspector of Works and merge it with JE in order to bring parity with the CPWD. The decision of the committee could not be given effect to immediately as consultations and correspondences continued for long. Meanwhile, the 5th CPC recommended Assured Career Progression Scheme from 09.08.1999. On the approval of the Ministry the post of IOW was abolished in 2007 and consequential merger with the lower post of JE became effective. Thereafter, the O.A No.1091/2016 3 applicant was extended the benefit of the 1 st and 2nd financial upgradation on 09.08.1999 and 15.03.2007 respectively. Subsequently, the date of effect of the 2 nd financial upgradation was preponed to 02.07.2004 by reckoning the service of the applicant under the Work Charged Establishment. The applicant has retired from service on 30.11.2016. Before his retirement, on 23.07.2016 the 3rd respondent issued Annexure-A1 order re-fixing the pay of the applicant from the date of initial appointment. Accordingly, it was shown that huge amounts were paid to the applicant in excess and thus when his retiral benefits were sanctioned, he was shown to have been given an excess sum of Rs.9,07,922/- from which Rs.60,000/- was already recovered and a sum of Rs.8,47,922/- was withheld from the DCRG.
2. According to the applicant, most of the beneficiaries of the cadre re-structuring and the consequential upgradations under the ACP scheme had already retired from service after peacefully enjoying the benefits. While so, from 2014 onwards, the Pay and Accounts O.A No.1091/2016 4 Officer raised objections on the dates of financial upgradation under the ACP Scheme consequent on the cadre re-structuring and started recovering pensionary benefits from the retiring Engineering staff. The idea of cadre restructuring was introduced and a committee was constituted to go into the same and to make suitable recommendations with the specific object of implementing it without delay so that the ultimate beneficiaries are not prejudiced in any manner. But it was unduly delayed and was actually implemented only in 2007. Everything was done with the approval of the Ministry. The matter was known to the Pay and Accounts Officer also. He had not made any objection earlier, but such an over payment was observed and amounts were recovered from his salary only on the eve of is retirement. Aggrieved, the applicant has approached this Tribunal for quashing Annexure-A1 and to restore the benefits of pay fixation as it stood prior to Annexure-A1 with all consequential benefits like releasing the withheld amount of retirement gratuity and refund the amount already recovered from his salary. O.A No.1091/2016 5
3. Now the respondents have taken the stand that ACP should have been granted to the applicant reckoning service from the date of regular appointment and not from the date of his appointment as Work Charged employee. Everything is done to his detriment. According to the applicant, the competent authority did not raise any objection but the PAO who is only a recommendary authority has no jurisdiction to dictate amendments to the date of implementation of the financial upgradation granted to him. That has caused him considerable financial loss. So he has challenged Annexure-A1 order on various grounds. It is stated that the respondents went wrong in re-fixing his pay to the detriment of the applicant from the date of his initial appointment belatedly, without affording him an opportunity. The PAO was acting without jurisdiction, it was illegal to re-fix pay to his prejudice, surpassing the competent authority. In this connection, he has also relied on the decisions of the Hon'ble Supreme Court in Commissioner of Police, Bombay v. Gordhandas Bhanji [AIR 1952 SC 16], Orient Paper Mills v. Union of India [AIR 1969 SC 48], O.A No.1091/2016 6 Rambharosa Singh v. State of Bihar [AIR 1953 PATNA 370], Nagaraj Shivarao Karjagi v. Syndicate Bank [(1991) 3 SCC 219], State of Gujarat and another v. M/s.Krishna Cinema and others [AIR 1971 SC 1650] etc.
4. Similarly, it is stated that his pay was re-fixed violating the principles of natural justice, without affording him an opportunity. For this, he placed reliance on State of Orissa v. Binapani Dei [AIR 1967 SC 1269], Smt.Maneka Gandhi v. Union of India [AIR 1978 SC 597], Mohinder Singh Gill v. Chief Election Commissioner of India [AIR 1978 SC 851] etc. He also alleges that Annexure-A1 is the outcome of non- application of mind and the 3 rd respondent was acting mechanically. Cadre restructuring had delayed inordinately due to the faults of the respondents and the applicant cannot be made to suffer for the same. He also relied on the decision in State of Punjab and Others v. Rafiq Masih (White Washer) [AIR 2015 SC 696] to support his contention in effecting recovery from the employees who are due to retire within one year or who have already retired from service.
O.A No.1091/2016 7
5. The respondents have strongly defended their act in re- fixing the pay of the applicants from the initial date of appointment and effecting recovery of excess payment made all along. According to them, the applicant was appointed as Overseer (Electrical) on 02.07.1980 on adhoc basis and later was regularised with effect from 15.03.1983. He was appointed as JE on regular basis on 02.02.1985. Referring to Annexure-R1 OM they said that it has been clarified that if the appointment is made to higher pay scale as direct recruitment, such appointment shall be treated as direct entry grade and past service shall not be counted for the benefit of ACP. Thus the 1 st and 2nd upgradation under ACP/MACP was granted by counting 12 years and 20 years respectively from the date of appointment as JE and pay re- fixed in supersession of the previous orders of pay fixation. While granting ACP the service of adhoc appointment under Work Charged Establishment in the lower post of Overseer was counted inadvertently and grade pay of Rs.6600/- was allowed in the 2 nd ACP. In order to rectify the error, subsequently the same was withdrawn as O.A No.1091/2016 8 per Annexure-R2 order. According to them, many employees, names of some of whom have been given in the reply, to whom such re- fixation and excess payment were granted had refunded the amount. Therefore, the contention of the applicant as if such a course was arbitrary cannot be accepted. According to them, the decision in Rafiq Masih, is not applicable to the facts of the case. On the other hand, what is applicable is the decision in Chandi Prasad Uniyal and others v. State of Uttarakkand and others [(2012) 8 SCC 417], following which Annexure-R3 OM was issued; recovery of Rs.60,000/- was made and withholding of amount from the DCRG was done following Annexure-R3 OM which holds the field. So, the respondents contend that the applicant is not entitled to get any relief.
6. We heard the learned counsel for the applicant as well as the learned Senior Central Government Standing Counsel for the respondents.
7. Both the counsel have argued in line with the contentions raised in the O.A. and the reply statement respectively. According to O.A No.1091/2016 9 the learned counsel for the applicant, in an identical case, in O.A. 276/2016, after hearing similar objections raised by the respondents, the application was allowed and such a recovery was interfered with by the Tribunal. Thus the learned counsel pressed for granting relief on similar lines.
8. On the other hand, according to the learned Senior Central Government Standing Counsel, the said order of this Tribunal in O.A.276/2016 rendered on 23.11.2016 has been called in question in O.P.(CAT) 141/2017 which is pending before the Hon'ble High Court and therefore there is no justification in placing reliance on the same.
9. The service profile of the applicant is not in dispute. He had joined service of the ALHW as Overseer on adhoc basis in July 1980 and later was absorbed as Engineering Assistant and then promoted as Inspector of Works. At that time, cadre re-structuring was being contemplated, for which a committee was formed by the respondents in February 1996. Though the committee had decided to abolish the post of Inspector of Works and merge it with JE for O.A No.1091/2016 10 bringing parity with CPWD, that decision was actually implemented only in 2007. By the time, the applicant was granted ACPs on 09.08.1999 and 15.03.2007. Moreover, Annexure-A3 indicates that date of his 2nd ACP was further preponed. Originally, he was granted 2nd ACP from 15.03.2007, which was preponed to 02.07.2004. On such occasions there was no audit objection and he drew salary and allowances as per the non-functional upgradation granted under the ACP/MACP.
10. But a re-thinking was made only on the eve of his retirement and that was how Annexure-A1 was issued on 23.07.2016, which indicates that his salary was re-fixed from the very inception, when he was initially appointed on adhoc basis on 02.07.1980 uptill his retirement on 30.11.2016. It was found that he was paid an excess payment of Rs.9,07,922/-. Before he retired and before Annexure-A5 pensionary benefits were disbursed, a sum of Rs.60,000./- was already recovered from his salary and allowances and the balance amount of Rs.8,47,922/- was withheld from the retirement gratuity. O.A No.1091/2016 11
11. The amount of Rs.60,000/- recovered from his salary and allowances pertained to the period from June 2016 to October 2016 at the rate of Rs.10,000/- per mensum. The applicant had retired on superannuation on 30.11.2016. Annexure-A1 office order issued by the 3rd respondent indicates that he had commenced service on 02.07.1980 as Overseer and till the date of issue covering a period from 02.07.1980 till 01.07.2016, that is a long spell about 36 years have been refixed in one go finding that the applicant was paid an excess amount which has been sought to be recovered. A portion of the amount had already been recovered and the balance was withheld from his DCRG.
12. The respondents submit that when the ACPs were granted the period of adhoc appointment was also taken into consideration inadvertently, and the excess amount is the salary and allowances disbursed to the applicant by mistake. They also have relied on the clarification issued by the Ministry. In this connection, it is important to highlight that the respondents have no case that the applicant was O.A No.1091/2016 12 privy to any such decision for payment of excess salary and allowances. Only thing is that he was the beneficiary and he peacefully enjoyed the grant of ACPs and also subsequent ante-dating of the 2nd ACP. On those occasions, there was absolutely no doubt that he was being paid in excess. Only on the eve of his retirement that a review was done and he was made to repay substantial amount from his retiral benefits.
13. It is important to reiterate that there is no allegation that the applicant had played any role either active or passive for making such excess payment. No misrepresentation, fraud or undue influence has been attributed against him. Everything was the outcome of the volitions of the respondents. It was not an isolated case, but similar treatments were granted to numerous other employees as well. Specific case of the applicant is that many people who enjoyed the benefits of delayed restructuring have already collected the benefits of such over payment and then reitred from service for which no action has been initiated. On the other hand, according to the respondents, O.A No.1091/2016 13 some of them have already refunded payments made in excess. Relying on the decision in Chandi Prasad Uniyal, quoted supra, and Annexure-R3 they contend that such amounts are liable to be recovered.
14. We may hasten to state that Chandi Prasad Uniyal no longer can be followed in a blanket manner. The decision in Rafiq Masih was rendered after conducting a survey of all the decisions rendered on the subject till that day. The decision in Chandi Prasad Uniyal also has been referred there. In Rafiq Masih the Supreme Court has held that such recovery is invalid. It is worthwhile to quote paragraphs 7 and 8 of the Rafiq Masih, as below:
"7. Having examined a number of judgments rendered by this Court, we are of the view, that orders passed by the employer seeking recovery of monetary benefits wrongly extended to employees, can only be interfered with, in cases where such recovery would result in a hardship of a nature, which would far outweigh, the equitable balance of the employer's right to recover. In other words, interference would be called for, only in such cases where, it would be iniquitous to recover the payment O.A No.1091/2016 14 made. In order to ascertain the parameters of the above consideration, and the test to be applied, reference needs to be made to situations when this Court exempted employees from such recovery, even in exercise of its jurisdiction under Article 142 of the Constitution of India. Repeated exercise of such power, "for doing complete justice in any cause" would establish that the recovery being effected was iniquitous, and therefore, arbitrary. And accordingly, the interference at the hands of this Court.
8. As between two parties, if a determination is rendered in favour of the party, which is the weaker of the two, without any serious detriment to the other (which is truly a welfare State), the issue resolved would be in consonance with the concept of justice, which is assured to the citizens of India, even in the preamble of the Constitution of India. The right to recover being pursued by the employer, will have to be compared, with the effect of the recovery on the concerned employee. If the effect of the recovery from the concerned employee would be, more unfair, more wrongful, more improper, and more unwarranted, than the corresponding right of the employer to recover the amount, then it would be iniquitous and arbitrary, to effect the recovery. In such a situation, the employee's right would outbalance, and therefore eclipse, O.A No.1091/2016 15 the right of the employer to recover."
15. In conclusion, in paragraph 12, the Court has summarised as follow:
"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.
(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 O.A No.1091/2016 16 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."
16. Applicant retired from service as Assistant Engineer which is a Group-B non-gazetted post. He was granted 2 nd ACP from 02.07.2004. So the excess amount pertains to payment from 02.07.2004. At this distance of time, the legality and correctness of reckoning period of adhoc appointment for grant of ACP cannot be gone into. After having considered rival contentions, we are sure in our mind that the case of the applicant falls withing the parameters of clauses (ii), (iii) and (v), quoted supra.
17. As observed earlier, on the eve of retirement of the applicant, the respondents have re-fixed the salary of the applicant for a period from 02.07.2004 and found that he was paid excess amount of Rs.9,07,922/-, which was sought to be recovered from his salary for O.A No.1091/2016 17 about six months and also DCRG.
18. In our considered opinion, when this action is tested on the touchstones of equity and arbitrariness, it is extremely harsh to recover such amounts from the salary of an employee who was going to retire or has already been retired after rendering service for over 36 years. Therefore, in our view, the action of the respondents far outweighs the equity involved in the case.
19. Even though the argument of the applicant that, the PAO has no authority to interfere in such matters, cannot be upheld, for other overwhelming reasons the case of the applicant, as such is liable to be upheld. The very reason that they wanted to make recovery from the retirement benefits and last salaries of the applicant, on the steps initiated on the eve of his retirement is contrary to the parameters laid down by the Apex Court in Rafiq Masih, stated supra.
20. Moreover, the decision in Chandi Prasad Uniyal and Annexure-R3 OM cannot be applied to the facts of the case. In Chandi Prasad Uniyal, Supreme Court has taken the extreme stand that O.A No.1091/2016 18 whenever excess payments were made, restitution by way of recovery of amount in excess is justifiable, which cannot be called in question. But the subsequent decision in Rafiq Masih, that decision has been rendered in operational. Annexure-R3 also stands superseded by an OM issued on 02.03.2016 after rendering the judgment in Rafiq Masih, where the above stated parameters have been reiterated and the Department of Personnel and Training has informed all concerned that in such cases recovery is impermissible. That means, Annexure- R3 has become redundant, which stands superseded by the OM dated 02.03.2016.
21. We have also been taken through the order of this Tribunal in O.A.276/2016, where an identical case has been dealt with by a Bench and allowed the application on 23.11.2016 in terms of the prayers. After going through the said order, we are in respectful agreement with the analogy and reasonings recorded by the Bench. Even though that order is under challenge in OP(CAT) 141/2017, which is pending, in our view, following the decision in Rafiq Masih and the O.A No.1091/2016 19 OM dated 02.03.2016 recovery from the salary of the applicant and withholding of his DCRG are illegal and therefore we are inclined to allow the application.
Resultantly, the respondents are directed to refund Rs.60,000/- already recovered from the salary of the applicant and also pay him the sum of Rs.8,47,922/-, withheld from the retirement gratuity. This shall be done within a period of 90 days from the date of receipt of a copy of this order. We make no order as to costs.
(Dated, this the 9th February, 2024)
K.V.EAPEN JUSTICE K.HARIPAL
ADMINISTRATIVE MEMBER JUDICIAL MEMBER
ds
O.A No.1091/2016 20
List of Annexures
Annexure A-1: True copy of the Office Order No. 469/2016 (No.
DCE/KVT/ESTT/127(A)/1794 dated 23.7.2016
Annexure A-2: True copy of the Office Order No. 626/2008 (No.
ALHW/ADM/2(20)/2008) dated 16/17.09.2008
Annexure A-3: True copy of the Office Order No. 563/2010 (No.
ALHW/ADM/2(6)/2009/2919 dated 6.8.2010
Annexure A-4: True copy of the representation dated 23.11.2016
submitted by the applicant
Annexure A-5: True copy of the Letter No. DCE/KVT/Estt/Pension/
1750/3043 dated 3.12.2016
Annexure R1: True Copy of the relevant pages of Clarification under
OM dated 10.2.2000 of Do PT.
Annexure R2: True Copy of the Order Ref. No. 25021/7/2012-MP of
Ministry of Shipping dated 16.5.2014
Annexure R3: True copy of the OM dated 6.2.2014 of DoPT.
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