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2018 DIGILAW 194 (KER)

Sivan Kurup v. K. S. R. T. C.

2018-02-27

ANIL K.NARENDRAN

body2018
JUDGMENT : 1. The petitioner, who was an employee of the 1st respondent Kerala State Road Transport Corporation, retired from service on 31.1.2015, on attaining the age of superannuation, while working as Store Assistant at Cherthala depot under the 4th respondent District Transport Officer. Ext.P1 is the pension payment order issued by the Deputy Chief Accounts Officer of the 1st respondent Corporation. The grievance of the petitioner in this writ petition is against Ext.P4 order dated 5.8.2017 of the Chairman and Managing Director of the 1st respondent Corporation, whereby the petitioner was informed that there is a liability of Rs. 4,23,868/- and as such, he is entitled for disbursement of DCRG amounting to Rs. 3,07,530/- and commuted value of pension amounting to Rs. 1,85,281/- only after giving a consent letter to deduct the said liability from DCRG and commuted value of pension. The petitioner has approached this Court in this writ petition seeking a writ of certiorari to quash Ext.P4 order to the extent a liability of Rs. 4,23,868/- is fastened upon him. The petitioner has also sought for other consequent reliefs, including a writ of mandamus commanding the respondents to disburse DCRG amounting to Rs. 3,07,530/- and also commuted value of pension amounting to Rs. 1,85,281/- with reasonable interest. 2. A counter affidavit has been filed on behalf of respondents 1 and 2, contending that the petitioner's pay was fixed in the category of Conductor Grade I with effect from 10.7.2000 by mistake and accordingly, he received ineligible pay from 10.7.2000 onwards, till retirement. At the time of exercising option in the grade of Conductor Grade I, the petitioner had submitted Ext.R1(a) declaration dated 24.8.2000 that excess payment, if any, made in connection with pay revision shall be refunded. Therefore, according to the respondents, the recovery in terms of Ext.P4 is legally permissible in view of the statutory provisions contained in Note 2 to Rule 3. of Part III Kerala Service Rules (for brevity, ‘KSR’). 3. Heard the learned counsel for the petitioner and also the learned Standing Counsel for KSRTC representing respondents 1 to 4. 4. The pleadings and materials on record would show that the petitioner retired from service on 31.1.2015 on attaining the age of superannuation, while working as Store Assistant at Cherthala depot of the 1st respondent Corporation. He entered service as Conductor Grade II, with effect from 28.12.1987. 4. The pleadings and materials on record would show that the petitioner retired from service on 31.1.2015 on attaining the age of superannuation, while working as Store Assistant at Cherthala depot of the 1st respondent Corporation. He entered service as Conductor Grade II, with effect from 28.12.1987. According to the petitioner, in the year 1990 he had a fatal attack of Cerebral Meningitis and had undergone inpatient treatment in the Government Medical College, Alappuzha and also in the Medical College Hospital, Thiruvananthapuram. In connection with the treatment he was on leave without allowance from 18.9.1992 to 9.7.2000, for a period of seven years, 9 months and 24 days. Thereafter, the petitioner applied for category change to the post of Store Issuer Grade II and accordingly he was allowed category change to the post of Store Issuer Grade II, vide memorandum No. PLC4/00941/2000 dated 30.6.2000. 5. The fact that, after rejoining duty on 10.7.2000, the petitioner had not performed the duties of a Conductor is not in dispute. As per the rules governing the grant of grade promotions, an employee working as Conductor Grade II, on completion of 9 years of qualifying service in that Grade, is entitled for grade promotion as Conductor Grade I. At the time of availing medical leave in the year 1992, the petitioner had only 3 years service as Conductor Grade II. The period during which the petitioner was on leave without allowance, i.e. the period from 18.9.1992 to 9.7.2000, cannot be reckoned for grade promotion, as per the relevant rules. Without noticing the said fact the petitioner was granted grade promotion as Conductor Grade I with effect from 10.7.2000, and his pay was regulated accordingly. 6. At the time of exercising option in the Grade of Conductor Grade I, the petitioner submitted Ext.R1(a) declaration dated 24.8.2000 as if he is continuing as conductor. In Ext.R1(a) the petitioner had undertaken that excess payment, if any, made in connection with pay revision shall be refunded. 6. At the time of exercising option in the Grade of Conductor Grade I, the petitioner submitted Ext.R1(a) declaration dated 24.8.2000 as if he is continuing as conductor. In Ext.R1(a) the petitioner had undertaken that excess payment, if any, made in connection with pay revision shall be refunded. The petitioner, who had obtained category change as Store Issuer vide memorandum dated 30.6.2000, suppressed the said fact while exercising the option in the grade of Conductor Grade I. Later, while verifying the service book of the petitioner, the Audit Wing of the 1st respondent Corporation found out the irregularity in the fixation of pay and accordingly the pay of the petitioner was re-fixed and the amount which was received by him in excess of what is legally due is quantified as Rs. 4,23,868/- which is sought to be recovered by Ext.P4 order dated 5.8.2017. 7. The fact that, after the leave without allowance for the period from 18.9.1992 to 9.7.2000 the petitioner rejoined duty as Store Issuer Grade II, under the 4th respondent stands admitted in para.3 of the statement of facts of the writ petition. In para.4, the petitioner has also stated that he is not aware as to how he was promoted as Conductor Grade I and paid salary as Conductor Grade I. However, Ext.R1(a) declaration dated 24.8.2000 produced along with the counter affidavit filed by the respondents would make it explicitly clear that the petitioner exercised option for grade promotion as Conductor Grade I and it was accordingly that he was granted fixation of pay in the grade of Conductor Grade I. Thus the petitioner received ineligible pay from 10.7.2000 till retirement, i.e. till 31.5.2015. Now the said excess payment is sought to be recovered from his terminal benefits, based on Ext.P4 order dated 5.8.2017. 8. In State of Punjab vs. Rafiq Masih (White Washer), (2015) 4 SCC 334 the private respondents in the bunch of cases before the Apex Court were given monetary benefits, which were in excess of their entitlement. Those benefits flowed to them, consequent upon a mistake committed by the competent authority, in determining the emoluments payable to them. On account of the said unintentional mistake, the employees were in receipt of monetary benefits, beyond their due. Those benefits flowed to them, consequent upon a mistake committed by the competent authority, in determining the emoluments payable to them. On account of the said unintentional mistake, the employees were in receipt of monetary benefits, beyond their due. The payment of higher dues to the private respondents was not on account of any misrepresentation made by them, nor was it on account of any fraud committed by them. In paragraph 2 of the judgment, the Apex Court ruled out any participation of the private respondents, in the mistake committed by the employer, in extending them undeserved monetary benefits. Paragraph 2 of the said decision reads thus; “2. Another essential factual component in this bunch of cases is, that the respondent- employees were not guilty of furnishing any incorrect information, which had led the concerned competent authority, to commit the mistake of making the higher payment to the employees. The payment of higher dues to the private respondents, in all these cases, was not on account of any misrepresentation made by them, nor was it on account of any fraud committed by them. Any participation of the private respondents, in the mistake committed by the employer, in extending the undeserved monetary benefits to the respondent- employees, is totally ruled out. It would therefore not be incorrect to record, that the private respondents, were as innocent as their employers, in the wrongful determination of their inflated emoluments.” (Underline supplied) 9. The issue that came up for consideration before the Apex Court in Rafiq Masih's case was as follows; “Merely on account of the fact, that the release of these monetary benefits was based on a mistaken belief at the hands of the employer, and further, because the employees had no role in the determination of the employer, could it be legally feasible for the private respondents to assert that they should be exempted from refunding the excess amount received by them?” (Underline supplied) 10. In Rafiq Masih's case, while laying 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, the Apex Court made it clear that, the said benefit cannot be extended to an employee merely on account of the fact that he was not an accessory to the mistake committed by the employer; or merely because the employee did not furnish any factually incorrect information, on the basis whereof the employer committed the mistake of paying the employee more than what was rightfully due to him; or for that matter, merely because the excessive payment was made to the employee, in absence of any fraud or misrepresentation at the behest of the employee. Having examined a number of decisions, the Apex Court observed 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 made. In Para.18 of the said decision, the Apex Court summarised few situations, wherein recoveries by the employers would be impermissible in law. Para-18 of the decision reads thus; “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. (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.” 11. In High Court of Punjab and Haryana vs. Jagdev Singh, (2016) 14 SCC 267 the Apex Court held that the principle enunciated in proposition (ii) in Rafiq Masih's case (supra) that recovery by the employer would be impermissible in law from the retired employees, or the employees who are due to retire within one year, of the order of recovery, cannot be applied to a situation where 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 and he is bound by the undertaking. Paras.10 and 11 of the said decision read thus: “10. In State of Punjab vs. Rafiq Masih (White Washer), (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: xxx xxx xxx (ii) Recovery from retired employees, or employees who are due to retire within one year, of the order of recovery. xxx xxx xxx 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. 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. In Jagdev Singh's case (supra) the Apex Court was dealing with a case in which the respondents therein was appointed as Civil Judge (Junior Division) on 16.7.1987, who was promoted as Additional Civil Judge on 28.8.1997. By a notification dated 28.9.2001, the pay scale of 10000-325-15200 (Senior Scale) was allowed under the Haryana Civil Service (Judicial Branch) and Haryana Superior Judicial Service Revised Pay Rules, 2001. Under the said Rules, each officer was required to submit an undertaking that any excess which may be found to have been paid will be refunded to the Government either by adjustment against future payments due or otherwise. The respondent furnished an undertaking and was granted the revised pay scale of selection grade of 14300-400-18000-300. While opting for the revised pay scale, the respondent undertook to refund any excess payment, if it was so detected and demanded subsequently. The revised pay scale in the selection grade was allowed to the respondent on 7.1.2002. He was placed under suspension on 19.8.2002 and eventually, was compulsorily retired from service on 12.2.2003. Later, the pay scales of judicial officers in Haryana were once again revised with effect from 1.1.1996. An exercise was undertaken for adjustment of excess payment made to judicial officers, following the notification of the revised pay rules. On 18.2.2004, a letter for the recovery of an amount of Rs. 1,22,003/- was served upon the respondent, pursuant to the direction of the Registrar of the High Court. The respondent challenged the action for recovery in a writ petition under Article 226, which was allowed by the impugned judgment of the High Court. Ultimately it was carried to the Apex Court. 1,22,003/- was served upon the respondent, pursuant to the direction of the Registrar of the High Court. The respondent challenged the action for recovery in a writ petition under Article 226, which was allowed by the impugned judgment of the High Court. Ultimately it was carried to the Apex Court. After referring to the decision in Rafiq Masih's case (supra) the Apex Court held that, the principle enunciated in proposition (ii) that recovery by the employer would be impermissible in law from the retired employees, or the employees who are due to retire within one year, of the order of recovery, cannot be applied to a situation where 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 who furnished an undertaking while opting for the revised pay scale is bound by that undertaking. 13. In Rafiq Masih's case (supra) the private respondents in the bunch of cases before the Apex Court were given monetary benefits, which were in excess of their entitlement, consequent upon a mistake committed by the competent authority in determining the emoluments payable to them. The payment of higher dues to the private respondents was not on account of any misrepresentation made by them, nor was it on account of any fraud committed by them. Therefore, the issue that came up for consideration before the Apex Court was as to whether the private respondents, who had no role in the determination of monetary benefits by the employer on a mistaken belief, should be exempted from refunding the excess amount received by them. Therefore, the issue that came up for consideration before the Apex Court was as to whether the private respondents, who had no role in the determination of monetary benefits by the employer on a mistaken belief, should be exempted from refunding the excess amount received by them. While laying 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, the Apex Court made it clear that, the said benefit cannot be extended to an employee merely on account of the fact that he was not an accessory to the mistake committed by the employer; or merely because the employee did not furnish any factually incorrect information, on the basis whereof the employer committed the mistake of paying the employee more than what was rightfully due to him; or for that matter, merely because the excessive payment was made to the employee, in absence of any fraud or misrepresentation at the behest of the employee. The parameters of fact situations laid down by the Apex Court in Rafiq Masih's case (supra) cannot be applied to a situation where such excess payment was on account of any fraud or misrepresentation at the behest of the employee to whom that excess payment was made by the employer mistakenly. Further, as held by the Apex Court in Jagdev Singh's case (supra), the principle enunciated in Rafiq Masih's case that recovery by the employer would be impermissible in law from the retired employees, or the employees who are due to retire within one year, of the order of recovery, cannot be applied to a situation where 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. 14. In the instant case, the petitioner entered service as Conductor Grade II with effect from 28.12.1987. He was on leave without allowance from 18.9.1992 to 9.7.2000, for a period of seven years, 9 months and 24 days. Thereafter, the petitioner applied for category change to the post of Store Issuer Grade II and accordingly he was allowed category change to that post, vide memorandum dated 30.6.2000. He was on leave without allowance from 18.9.1992 to 9.7.2000, for a period of seven years, 9 months and 24 days. Thereafter, the petitioner applied for category change to the post of Store Issuer Grade II and accordingly he was allowed category change to that post, vide memorandum dated 30.6.2000. The fact that after rejoining duty on 10.7.2000 the petitioner had not performed the duties of a Conductor is not in dispute. As per the rules governing the grant of grade promotions, an employee working as Conductor Grade II on completion of 9 years of qualifying service in that Grade is entitled for grade promotion as Conductor Grade I. Without noticing the said fact the petitioner was granted grade promotion as Conductor Grade I with effect from 10.7.2000 and his pay was regulated accordingly. The petitioner, who had obtained category change as Store Issuer vide memorandum dated 30.6.2000, suppressed the said fact while exercising the option in the grade of Conductor Grade I. At the time of exercising option in the Grade of Conductor Grade I, the petitioner filed Ext.R1(a) declaration dated 24.8.2000 as if he is continuing as conductor. Later, while verifying the service book of the petitioner, the Audit Wing of the 1st respondent Corporation found out the irregularity in the fixation of pay and accordingly the pay of the petitioner was re-fixed and the amount which was received by him in excess of what is legally due is quantified as Rs. 4,23,868/- which is sought to be recovered by Ext.P4 order dated 5.8.2017. Since the excess payment made to the petitioner was on account of suppression of material facts and also on account of misrepresentation, the principle enunciated by the Apex Court in Rafiq Masih's case (supra) has no application to the fact situation of the present case. Further, the petitioner, who had undertaken in Ext.R1(a) to refund excess payment, if any, made in connection with pay revision, is bound by that undertaking. Further, the petitioner, who had undertaken in Ext.R1(a) to refund excess payment, if any, made in connection with pay revision, is bound by that undertaking. Therefore, the principle enunciated in Rafiq Masih's case that recovery by the employer would be impermissible in law from the retired employees, or the employees who are due to retire within one year, of the order of recovery, has no application to the fact situation of the present case, where the petitioner 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. 15. Rule 3C of Part III of the KSR deals with recovery of excess payment made to an officer by mistake. As per Rule 3C, notwithstanding anything contained in the rules, recovery of excess payment made to an officer by mistake within a period of four years before his retirement and which are detected within a period of four years after retirement alone can be recovered from his pension and other amounts due to him after retirement, subject to the condition that such deduction made from his pension shall be effected only in monthly instalments and that the amounts of each instalments shall not exceed 10% of the monthly pension permissible to him. 16. In the instant case, the petitioner retired from service on attaining the age of superannuation on 31.1.2015. In view of the undertaking given by the petitioner in Ext.R1(a) and also the statutory provisions under Rule 3C of Part III of KSR, the respondents are legally entitled to recover the excess payment made to the petitioner in the Grade of Conductor Grade I, within a period of four years before his retirement, since such excess payment was detected within a period of four years after his retirement. In the result, this writ petition is disposed of by setting aside Ext.P4 order of the 1st respondent to the extent of ordering recovery of excess payment made to the petitioner in the Grade of Conductor Grade I, for the period in excess of four years before his retirement. In the result, this writ petition is disposed of by setting aside Ext.P4 order of the 1st respondent to the extent of ordering recovery of excess payment made to the petitioner in the Grade of Conductor Grade I, for the period in excess of four years before his retirement. The 1st respondent shall quantify the excess payment made to the petitioner in the Grade of Conductor Grade I within a period of four years before his retirement, with notice to the petitioner and after affording him an opportunity of being heard, as expeditiously as possible, at any rate, within a period of one month from the date of receipt of a certified copy of this judgment. Thereafter, the respondents shall disburse the terminal benefits payable to the petitioner, within a further period of three weeks.