Facts
N. Sundararajan (Applicant in OA 271/2021) was promoted ad-hoc as SMM, Senior Scale on May 29, 2013, and later appointed to Group A/Junior Scale of Indian Railway Stores Service (IRSS) with effect from August 5, 2015.
Source reference: p.3-4His pay was revised under Rule 1313 R-II from July 1, 2013, and he retired on May 31, 2017.
Source reference: p.3-4J. Sidhanandan (Applicant in OA 337/2021) was promoted ad-hoc and appointed to Group A/Junior Scale of IRSS with effect from March 12, 2014.
Source reference: p.4His pay was revised under Rule 1313 R-II from April 17, 2009, and he retired on April 30, 2017.
Source reference: p.4On September 7, 2020, after their retirement, the 2nd respondent initiated notices for downward revision of their pay, leading to the recovery of alleged overpayment from pension, gratuity, and other retirement benefits.
Source reference: p.4The applicants submitted representations on October 6, 2020, but the respondents proceeded to revise their pay via Office Order dated February 12/17, 2021, without providing an opportunity to be heard.
Source reference: p.4The promotional orders and pay fixation statements were endorsed to Associate Finance in 2013, who remained silent until after the employees’ retirement in 2017.
Source reference: p.11The Associate Finance then raised the issue, leading to a clarification from the Railway Board on December 12, 2018, reiterating that re-fixation of pay in the Senior Scale, if already officiating, should not be done upon absorption into Group A/Junior Scale.
Source reference: p.6, 11This clarification was contrary to a previous Railway Board letter dated October 29, 2014, which allowed the option for pay fixation on ad-hoc promotion followed by regular appointment.
Source reference: p.5, 10-11The Railway Board subsequently negated requests to re-examine the case, reaffirming its stance vide letter dated January 6, 2019.
Source reference: p.7, 12Issues
Whether the Office Order dated February 12/17, 2021, initiating recovery proceedings for revision of pay from the retired applicants, is legally permissible.
Source reference: p.2Whether executive instructions can override statutory rules regarding pay fixation.
Source reference: p.8, 13Whether the denial of the option for pay fixation provided under Rule 1313 (FR-22(I)) of the Indian Railway Establishment Code (IREC) through executive instructions is in contravention of statutory provisions.
Source reference: p.8, 13Law Applied
The court primarily applied the principles laid down by the Supreme Court in State of Punjab & Ors. Vs. Rafiq Masih (White Washer) in Civil Appeal No. 11527 of 2014, which enumerated situations where recovery of excess payment from employees is impermissible, notably from retired employees.
Source reference: p.7-8It further referred to Rule 1313 (FR-22(I)) of the Indian Railway Establishment Code (IREC), which governs the initial pay fixation of railway servants appointed or promoted to a higher post, including the option for pay fixation.
Source reference: p.8-9The court also relied on established precedents regarding the hierarchy of legal provisions, stating that executive instructions cannot override statutory rules, citing Sant Ram Sharma Vs. State of Rajasthan (AIR 1967 SC 1910), Paluru Ramkrishnaiah Vs. Union of India (AIR 1990 SC 166), Union of India Vs. Ashok Kumar Aggarwal (AIRONLINE 2013 SC 479), and Employees’ State Insurance Corporation Vs. Union of India (2022 INSC 77).
Source reference: p.13-14Reasoning
The court observed that the applicants were retired employees, and recovery initiated after their retirement falls under the impermissible situations outlined in Rafiq Masih.
Source reference: p.8The core legal issue revolved around the conflict between the statutory Rule 1313 (FR-22(I)) of IREC and the executive instructions issued by the Railway Board.
Source reference: p.8Rule 1313 (FR-22(I)) provides an option for pay fixation, particularly in cases where ad-hoc promotion is followed by regular appointment without a break.
Source reference: p.9The respondents' argument that no such option was available for Group B officers promoted to Group A was rejected by the court, as the rule does not explicitly distinguish between promotions within Group B or from Group B to Group A, and any promotion implies higher responsibilities justifying higher pay.
Source reference: p.13The court emphasized that executive instructions (such as those from 2003, 2018, and 2019) cannot override or contravene statutory rules.
Source reference: p.13The silence of the Associate Finance for years after the initial pay fixation in 2013, and the subsequent initiation of recovery after the applicants' retirement, further compounded the inequity.
Source reference: p.11The court found that the executive instructions relied upon by the respondents were in contravention of the clear statutory rule.
Source reference: p.14Holding
The court concluded that the denial of the statutory right to pay fixation under Rule 1313 (FR-22(I)) of IREC by executive instructions was impermissible.
Additionally, recovery of alleged overpayment from retired employees, several years after the pay fixation and after retirement, was "impermissible in law".
Source reference: p.14Consequently, the impugned Office Order dated February 12/17, 2021, was quashed and set aside.
Source reference: p.14The respondent authorities were directed to fix the applicants' pay in accordance with the option exercised during their promotion to Group A in 2013 and to provide all consequential benefits.
Source reference: p.14Any recovery already effected is to be refunded to the applicants within three months from the date of the order.
Source reference: p.15The OAs were allowed.
Source reference: p.15Original Court PDF
N.Sundararajanvs.The General Manager, Integral Coach Factory and J.Sidhanandanvs.The Union of India [OA Nos. 271/2021 & 337/2021]
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