Full Judgment Text
REPORTABLE
2024 INSC 591
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO(S). 1635 OF 2013
JAGDISH PRASAD SINGH .…APPELLANT(S)
VERSUS
STATE OF BIHAR AND OTHERS ….RESPONDENT(S)
J U D G M E N T
Mehta, J.
1. Heard.
2. This appeal by special leave is directed against the final
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judgment dated 27 August, 2012 passed by the Division Bench
of the High Court of Judicature at Patna in Letters Patent Appeal
No. 1254 of 2011, whereby the said appeal preferred by the
rd
appellant herein was dismissed and the judgment dated 23
February, 2010 passed by the learned Single Judge of the High
Signature Not Verified
Digitally signed by
KAVITA PAHUJA
Date: 2024.08.08
15:10:58 IST
Reason:
Court in Civil Writ Jurisdiction Case(CWJC) No. 18542 of 2009
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rd
and so also the judgment dated 23 March, 2011 passed by the
learned Single Judge in Civil Review No. 82 of 2010 were upheld.
3. Facts in a nutshell are that the appellant herein was
appointed to the post of Supply Inspector in the Government of
Bihar in the year 1966. After serving for 15 years, he received his
first time bound promotion as Marketing Officer and was put in
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Junior Selection Grade w.e.f. 1 April, 1981. Upon completing 25
years in service, the appellant was further promoted to the post of
Senior Selection Grade, Marketing Officer-cum-Assistant District
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Supply Officer(in short ‘ADSO’) w.e.f. 10 , March 1991 in the pay
scale of Rs.2000-3800.
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4. The Government of Bihar issued a Resolution dated 8
February, 1999 revising the pay scale of Marketing Officer from
Rs.1640-2900 to Rs.5500-9000 and that of ADSO, from Rs.2000-
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3800 to Rs.6500-10500 w.e.f. 1 January, 1996. Since the
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appellant had been promoted as ADSO w.e.f. 10 March, 1991, his
pay scale was revised to Rs.6500-10500 in accordance with the
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Resolution dated 8 February, 1999 which is quoted below for
ready reference: -
"11. The State Government have decided to abolish the
existing facilities of Time Bound Promotions and Selection
Grades, discussed in paras 10 and 12 of F.D. Resolution
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No.6021 dated 18 December, 1989 and they shall cease to
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be applicable with effect from 1 January, 1996 and
thereafter in the existing pay scales. If any such
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promotion, however, is due under the Rules before 1
January, 1996, it shall be given and the payment of
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arrears in the existing scale shall be made only upto 31
December, 1995 after which the promotion would be
deemed to have been automatically terminated . While
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fixing pay in the revised scales, such promotions given after 31
December, 1995 will not be taken into consideration. If such
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promotions have been given after 31 December, 1995 then the
question of adjustment of such additional emoluments
obtained in the process, will be decided after the Fitment
Committee submits its recommendations on promotion Policy.
Promotion to any vacancy of a post identified as need based
post would be admissible. The procedure for identification of
such need based posts has been set out in paragraph 12. "
(emphasis supplied)
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5. The appellant superannuated from the post of ADSO on 31
January, 2001. At the time of retirement, the last pay drawn by
the appellant was Rs.10500 in the pay scale of Rs.6500-10500
with admissible emoluments. As per the Bihar Pension Rules of
1950, his pension was calculated at 50% of the average
emoluments and was quantified at Rs.5247 per month.
Accordingly, the pension as above was disbursed to the appellant
from the date of his retirement.
6. It seems that the Accountant General, State of Bihar, raised
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an objection dated 28 January, 2003, regarding the promotion
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accorded to the appellant on 10 March, 1991 with a further
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remark that the promotion given to the appellant on 10 March,
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1991 would become ineffective after 1 January, 1996 in view of
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the Government Resolution dated 8 February, 1999 and, thus,
the pay scale of the appellant would have to be revised and reduced
to match that of the lower post, i.e., the Marketing Officer.
7.
After more than eight years from his retirement, the appellant
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received a letter dated 15 April, 2009 from the Government of
Bihar conveying that an error had been committed in his pay
fixation and, therefore, a sum of Rs.63,765/- had to be recovered
from him as the same had been paid in excess beyond his
entitlement. The letter directed the appellant to refund the
aforesaid amount in one go or instalments. Language of the said
letter is extracted below :-
“With reference to the above mentioned subject it is
submitted that after receiving the enquiry report from the
enquiry officer of the departmental enquiry done against you
and the analysis of the department, it has been decided that a
sum of Rs.63,765/- has been paid to you in excess due to
mistake in fixation of pay which is recoverable from you.
Kindly make it clear whether you will pay the said amount
in one go or in instalments. Kindly submit your report in this
regard within 15 days to ensure further action.”
(emphasis supplied)
8. Being aggrieved by the recovery notice and the reduction of
his pension, the appellant made several representations to the
Government of Bihar protesting against the reduction of his
pension and the proposed recovery. However, when such
representations were not responded to by the concerned authority,
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the appellant preferred a petition under Article 226 of the
Constitution of India, being Writ Petition No. 6714 of 2009 before
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the High Court. The High Court, vide order dated 20 July, 2009
directed the State of Bihar to consider the appellant’s
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representation. Pursuant thereto, on 4 September 2009, the
appellant filed another detailed representation to the Government
of Bihar, pointing out that paragraph 11( supra ) of the Government
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Resolution dated 8 February, 1999 had been misinterpreted in
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the letter dated 15 April, 2009, to deny the benefit of the
admissible pay scale to the appellant as per his entitlement, which
led to the unjust reduction of his pensionary benefits. A pertinent
plea was taken in the representation that the paragraph 11 (supra)
could not be interpreted to the prejudice of the appellant as he had
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been given time bound promotion much before 31 December,
1995 and that the said Resolution specifically protected the
promotions made prior to the said date. Therefore, the appellant
was entitled to seek protection of his pay scale fixed in the bracket
of Rs.6500-10500 on the promotional post of ADSO.
9. The Secretary, Food and Consumer Protection Department,
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Government of Bihar issued a communication dated 8 October,
2009 rejecting the appellant’s representation observing that the
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promotion granted to the appellant would automatically come to
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an end after 31 December, 1995 by virtue of the Government
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Resolution dated 8 February, 1999 and hence, his pay scale
would have to be revised and reduced to Rs.5500-9000, by treating
the appellant on the post of Marketing Officer instead of ADSO at
the time of retirement.
10. The appellant preferred CWJC No. 18542 of 2009 before the
High Court of Patna assailing the said order. The learned Single
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Judge, vide order dated 23 February, 2010 dismissed the said
writ petition.
11. Asserting that his grievances had not been properly
addressed by the learned Single Judge, the appellant filed a Review
Petition No. 82 of 2010 before the High Court which was rejected
rd
vide order dated 23 March, 2011.
12. Being aggrieved by the aforesaid orders, the appellant filed
two Letters Patent Appeals being Letters Patent Appeal No. 1254
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of 2011, challenging the order dated 23 February, 2010 and
Letters Patent Appeal No. 815 of 2011 challenging the order dated
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23 March, 2011. Learned Division Bench, rejected the LPA No.
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815 of 2011 as not maintainable order dated 24 August,
vide
2012, whereas the LPA No. 1254 of 2011 was rejected vide order
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dated 27 August, 2012, holding that the revision and consequent
reduction in pay fixation of the appellant had been done in
accordance with the paragraph 11 (supra) of the Government
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Resolution dated 8 February, 1999 as per which, the appellant
was not entitled to the higher pay scale which had wrongly been
accorded to him. The said order is assailed in this appeal by special
leave.
Submissions on behalf of the appellant: -
13. Learned counsel for the appellant urged that the impugned
orders are ex facie bad in the eyes of law because the Government
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Resolution dated 8 February 1999, was misinterpreted by the
authorities as well as by the High Court. He urged that paragraph
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11 (supra) of the Government Resolution dated 8 February 1999,
clearly postulates that the same would not have any adverse effect
on the employees who had received the time bound promotions
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prior to 31 December 1995. Admittedly, the appellant had been
given time bound promotion as Senior Selection Grade, Marketing
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Officer-cum-Assistant District Supply Officer on 10 March, 1991,
which was long before the cut off date fixed under the said
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Government Resolution, i.e., 31 December, 1995 and thus, he
was rightfully conferred the benefit of the revised pay scale i.e.
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Rs.6500-10500 under the recommendations of the 5 Pay
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Commission. The Government Resolution dated 8 February,
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1999 having clearly indicated the cut-off date as 31 December,
1995, the appellant would be protected from the adverse effects
thereof and was entitled to protect his promotion and pay scale.
He thus, urged that the impugned orders are grossly illegal and
cannot be sustained.
14. He further contended that the reduction in the pay scale of
the appellant and the direction to effect recovery eight years after
his retirement, that too, without adhering to the principles of
natural justice, is even otherwise illegal, arbitrary and violative of
Articles 14 and 16 of the Constitution of India and thus, the same
cannot be sustained. He urged that the learned Single Judge as
well as the Division Bench of the High Court clearly fell in error
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while interpreting the Government Resolution dated 8 February,
1999 because paragraph 11 (supra) thereof protects the time bound
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promotion offered to the appellant as per his entitlement on 10
March, 1991 and so also the revised pay scale applicable to the
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said post under the 5 Pay Commission.
15. On these grounds, learned counsel for the appellant implored
the Court to set aside the impugned orders and the proposed
8
recovery from the appellant and so also the consequential
reduction in his future pensionary benefits.
Submissions on behalf of the respondent: -
16.
Per contra , learned counsel representing the State of Bihar,
vehemently and fervently opposed the submissions advanced by
the learned counsel for the appellant. It was contended that the
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Government Resolution dated 8 February, 1999 was made
uniformly applicable to all employees in the State of Bihar. The
appellant has not been singled out for the impugned action and
thus, there is no question of any discrimination being meted out
to the appellant. The Office of the Accountant General had noticed
the manifest error/irregularity in grant of revised pay scale to the
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appellant and thus, a letter dated 15 April, 2009 was issued
thereby, requiring the appellant to refund the excess amount
which he had received on account of wrong pay scale having been
conferred to him. He submitted that the learned Single Judge as
well as the Division Bench of the High Court rightly interpreted the
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Government Resolution dated 8 February, 1999 and recorded
concurrent findings of fact denying relief to the appellant and thus,
the appellant is not entitled to seek indulgence from this Court in
9
this appeal under Article 136 of the Constitution of India. He
urged that the appeal should be dismissed.
Discussions and Conclusion: -
17.
We have given our thoughtful consideration to submissions
advanced at bar and have gone through the material available on
record.
18. At the outset, we may note that the fact regarding the
appellant having been accorded time bound promotion from the
post of Marketing Officer in Junior Selection Grade to Senior
Selection Grade, Marketing Officer-cum-Assistant District Supply
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Officer(ADSO) as per his entitlement on 10 March 1991 is not in
dispute. It is not the case of the respondents that the said
promotion suffered from any irregularity or was given against the
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rules and regulations. The Resolution dated 19 January, 1991
placed on record as Annexure P-1 indicates that the next
promotional channel from the post of the Lower Senior
Grade(Marketing Officer) was to the post of Upper Senior
Grade(Upper Marketing Officer). Earlier, the pay scale for the post
of Lower Senior Grade(Marketing Officer) was fixed at Rs.1800-
3330 whereas for the promotional post i.e. Upper Senior
Grade(Marketing Officer), the applicable pay scale was fixed at
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Rs.2000-3800. The appellant having been duly promoted to the
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post of Upper Senior Grade(Upper Marketing Officer) w.e.f. 10
March, 1991 was entitled to and was rightly given the pay scale of
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the promotional post. Pursuant to the 5 Pay Commission being
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applied, the Government of Bihar issued a Resolution dated 8
February, 1999, whereby the pay scale applicable to the post of
Upper Senior Grade(Upper Marketing Officer) was revised from
Rs.2000-3800 to Rs.6500-10500. The paragraph 11 (supra) of the
said Government Resolution specifically protects the promotions
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granted to the employees prior to 31 December, 1995. Only those
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employees who were not promoted by the cut off date, i.e., 31
December, 1995 would get a notional promotion and consequent
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rise in pay scale which would come to an end w.e.f. 31 December,
1995. Apparently thus, the appellant could not have been put to
a disadvantage and his pay scale could not have been reduced
prospectively by virtue of the said Resolution. Even if paragraph
11 (supra) was not in existence, the appellant could not have been
subjected to eight years after his retirement because there was no
illegality in conferment of the revised pay scale to the appellant
which was an action taken by the State Government as per the
applicable rules and regulations.
11
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19. The order dated 15 April, 2009 whereby it was
communicated to the appellant that it had been decided to recover
a sum of Rs.63,765/- paid in excess due to mistake in fixation of
pay, also indicates that a departmental inquiry was conducted
against the appellant which had led to the impugned action. On a
pertinent query being made in this regard, the learned counsel
candidly conceded that no such departmental inquiry was ever
conducted against the appellant.
20. Without prejudice to the above findings, we are of the view
that no departmental action could have been initiated by the State
against the appellant after eight years following his
superannuation because the employer employee relationship had
come to an end after the appellant’s superannuation. The order
directing reduction in pay scale and recovery from the appellant
was manifestly not preceded by any show cause notice and was
thus, passed in gross violation of the principles of natural justice.
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Pursuant to the order dated 20 July, 2009 passed in the Writ
Petition No. 6714 of 2009 filed by the appellant, he submitted a
representation to the Secretary, Food and Consumer Protection
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Department, Government of Bihar, which order dated 8
vide
October, 2009 was rejected, preceded by a personal hearing. A
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perusal of the said order would indicate that the Secretary took a
view that as per paragraph 11 (supra) of the Government
Resolution, the first/second time bound promotion of the
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appellant had come to an end automatically w.e.f. on 1 January,
1996 and thus, the appellant was required to be redesignated to
the post of Marketing Officer and would be entitled to the revised
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pay of Rs.5500-9000 w.e.f. 1 January, 1996 as recommended by
the Fitment Committee. Thus, even in this order, the promotion
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conferred to the appellant to the post of ADSO on 10 March, 1991
is not doubted.
21. We firmly believe that any decision taken by the State
Government to reduce an employee’s pay scale and recover the
excess amount cannot be applied retrospectively and that too after
a long time gap. In the case of Syed Abdul Qadir and Others v.
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State of Bihar and Others , this Court held that when the excess
unauthorised payment is detected within a short period of time, it
would be open for the employer to recover the same. Conversely, if
the payment had been made for a long duration of time, it would
be iniquitous to make any recovery. The relevant paras of the Syed
Abdul Qadir are extracted hereinbelow: -
(supra)
1
(2009) 3 SCC 475
13
“57. This Court, in a catena of decisions, has granted relief
against recovery of excess payment of emoluments/allowances
if ( a ) the excess amount was not paid on account of any
misrepresentation or fraud on the part of the employee, and ( b )
if such excess payment was made by the employer by applying
a wrong principle for calculating the pay/allowance or on the
basis of a particular interpretation of rule/order, which is
subsequently found to be erroneous.
58. The relief against recovery is granted by courts not because
of any right in the employees, but in equity, exercising judicial
discretion to relieve the employees from the hardship that will
be caused if recovery is ordered. But, if in a given case, it is
proved that the employee had knowledge that the payment
received was in excess of what was due or wrongly paid, or in
cases where the error is detected or corrected within a short
time of wrong payment, the matter being in the realm of judicial
discretion, courts may, on the facts and circumstances of any
particular case, order for recovery of the amount paid in excess.
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. ”
(emphasis supplied)
22. Similarly, this Court in ITC Limited v. State of Uttar
2
Pradesh and Others , held as under: -
2
(2011) 7 SCC 493
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“108. We may give an example from service jurisprudence,
where a principle of equity is frequently invoked to give relief to
an employee in somewhat similar circumstances. Where the
pay or other emoluments due to an employee is determined and
paid by the employer, and subsequently the employer finds,
(usually on audit verification) that on account of wrong
understanding of the applicable rules by the officers
implementing the rules, excess payment is made, courts have
recognised the need to give limited relief in regard to recovery
of past excess payments, to reduce hardship to the innocent
employees, who benefited from such wrong interpretation. ”
(emphasis supplied)
23. In the case of State of Punjab and Others v. Rafiq
3
Masih (White Washer) and Others , this Court held as
under: -
“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.
(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.
3
(2015) 4 SCC 334
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( 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)
24. Recently, this Court in Thomas Daniel v. State of Kerala
4
and Others , held that the State cannot recover excess amount
paid to the ex-employee after the delay of 10 years.
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25. The Government Resolution dated 8 February, 1999 to be
specific, the highlighted portion supra is amenable to the
interpretation that it protects the status and pay of those
employees who had received their time bound promotions prior to
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31 December, 1995. As a consequence, the Secretary concerned,
while rejecting the representation clearly misinterpreted and
misapplied the said Resolution to the detriment of the appellant.
26. The learned Single Judge as well as the Division Bench of the
High Court of Patna also seem to have fallen in the same error. In
addition thereto, we are of the view that any step of reduction in
the pay scale and recovery from a Government employee would
tantamount to a punitive action because the same has drastic civil
as well as evil consequences. Thus, no such action could have
been taken against the appellant, more particularly, because he
4
2022 SCC OnLine SC 536
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had been promoted as an ADSO, while drawing the pay scale of
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Rs.6500-10500 applicable to the post, way back on 10 March,
1991 and had also superannuated eight years ago before the
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recovery notice dated 15 April, 2009 was issued. The impugned
action directing reduction of pay scale and recovery of the excess
amount is grossly arbitrary and illegal and also suffers from the
vice of non-adherence to the principles of natural justice and
hence, the same cannot be sustained.
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27. The order dated 8 October, 2009 passed by the State
Government directing reduction in the pay scale of the appellant
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from Rs.6500-10500 to Rs.5500-9000 w.e.f. 1 January, 1996 and
directing recovery of the excess amount from him is grossly illegal
and arbitrary and is hereby quashed and set aside. The impugned
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order dated 27 August, 2012 passed by the Division Bench of the
High Court does not stand to scrutiny and is hereby quashed.
Therefore, the appellant shall continue to receive the pension in
accordance with the pay scale of Rs.6500-10500.
28. In case, if any reduction in pension and consequential
recovery was effected on account of the impugned orders, the
appellant shall be entitled to the restoration/reimbursement
thereof with interest as applicable.
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29. The appeal is allowed in these terms. No order as to costs.
30. Pending application(s), if any, shall stand disposed of.
………………….……….J.
(SANDEEP MEHTA)
………………………….J.
(R. MAHADEVAN)
New Delhi;
August 08, 2024
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