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2022 DIGILAW 607 (KER)

Regional Cancer Centre (RCC), Represented by the Director v. Ganga Devi C.

2022-07-21

A.K.JAYASANKARAN NAMBIAR, MOHAMMED NIAS C.P.

body2022
JUDGMENT : Mohammed Nias C.P., J. These writ appeals are filed challenging the judgments of the learned single Judge that declared that the recovery effected by the appellant-Regional Cancer Centre (for short 'RCC') from its employees alleging erroneous payment in the fixation of pay was illegal. Writ Appeal Nos.869/2022, 670/2022, 676/2022, 680/2022, 761/2022, 790/2022762/2022 and 791/2022 were filed by RCC challenging the judgment which declared that recovery from the retirement benefits granted to the writ petitioners was illegal, with a further direction to release the amounts recovered from their gratuity and leave surrender. 2. The facts, leading to the above cases are as follows:- The writ petitioners in all these cases are retired employees of the Regional Cancer Centre (RCC), all of whom were granted the assessment promotions on completion of 5 and 8 years, under the Time Bound Grade Promotion (TBGP Scheme). The employees were also given promotion under the Flexible Complementing and Ladder Promotion (FCP and LP) which replaced the TBGP Scheme. The petitioners were thus promoted and granted enhanced pay on the basis of such promotion. While so, the pay scale of the employees of the RCC was made at par with the Sree Chithira Tirunal Institute of Medical Sciences and Technology (SCTIMST). The consequential pay revision was also ratified by the Government as per order dated 17.06.2000 with effect from 01.01.2007. The 6th Central Pay Band (CPC) was implemented for the non-academic staff in the RCC as per Government Order dated 3.11.2009 and monetary benefits were also made available from 01.01.2007. The Government also passed an order dated 08.01.2004 providing for notional fixation of pay to protect the service increments earned and accordingly the pay scales of the employees were revised. 3. Thereafter, a Three Member Committee was appointed to find out the anomalies in the fixation of the pay scale of the employees in the SCTIMST and RCC and to suggest corrective measures. The Committee suggested review of the assessment grade promotions granted to the non-academic staff and to fix their pay in the corresponding revised scale of pay, without granting the benefit of revised pay scales effected during the period from 01.03.1997 to 21.12.2005. Although the appellant issued proceedings based on the recommendations of the Committee, the same was not implemented as the appellant itself had sought a review of the recommendations. While so, the writ petitioners superannuated on various dates. Although the appellant issued proceedings based on the recommendations of the Committee, the same was not implemented as the appellant itself had sought a review of the recommendations. While so, the writ petitioners superannuated on various dates. After their retirement, provisional pension sanction orders were issued based on the provisional pay fixation order in tune with the Three Member Committee's recommendations which had the effect of lowering the pay scale of the employees and ignoring the TBGP granted for the 10 years completed service and as a consequence the fixation made as per the 6th Pay Commission Pay Band was stated to be wrong and the basic pay of the employees was sought to be lowered. The appellant also accorded sanction for recovering amounts allegedly paid in excess to the employees, all of whom by the time had retired. The recovery was directed to be effected from the petitioners' retiral benefits. It was these actions of lowering the scale, and effecting the recovery of the amounts alleging that they were in excess that were challenged in the writ petitions. 4. The appellant-RCC resisted the writ petitions contending that the petitioners were only entitled to the correct and eligible pay and that they were mistakenly granted benefits, which they were not entitled to going by the Three Member Committee's report that directed to rectify. The same was done which resulted in recovery of the excess amounts paid besides resulting in a re-fixation even in the last drawn pay. The appellant also contended that the some of the petitioners had executed a bond undertaking that their liability, if any, noted during the audit be recovered from their leave surrender, gratuity and pension benefits. 5. The learned single Judge who considered the writ petitions found that no steps were taken against the petitioner while they were in service and therefore the recovery of the alleged excess salary from the writ petitioner's gratuity and monetary component effected was held to be not justified. In holding so the judgment of the Supreme Court in State of Punjab v. Rafiz Masih (White Washer) [(2012) 4 SCC 334] and the decision of this Court in State of Kerala v. Suresh Chandran [2021 (3) KLT OnLine 1117] that held that the re-fixation of the pay after retirement as illegal was relied upon. In holding so the judgment of the Supreme Court in State of Punjab v. Rafiz Masih (White Washer) [(2012) 4 SCC 334] and the decision of this Court in State of Kerala v. Suresh Chandran [2021 (3) KLT OnLine 1117] that held that the re-fixation of the pay after retirement as illegal was relied upon. The learned single Judge also found that the writ petitioners were not afforded an opportunity of hearing before revising their pay and on these grounds the writ petitions were allowed. 6. WA Nos.869 /2022, 670/2022, 676/2022, 680/2022, 761/2022, and 762/2022 are filed by the RCC while WA No.52 of 2022 is filed by the writ petitioner, a retired employee challenging that part of the judgment in WP(C) No.6804 of 2021 which granted liberty to the RCC to re-fix the pay with notice. WA Nos. 791/2022 and 790/2022 were filed against the interim order granted in WP(C) Nos. 23086 of 2020 and 3294 of 2021, which only stayed the recovery, but allowed the appellant to continue the process of re-fixation. Since the issues to be decided were identical, WP(C) Nos. 23086 of 2020 and 3294 of 2021 which led to WA Nos.790 of 2022 and 791 of 2022 were also called for to be heard along with the writ petitions. 7. We have heard Sri. Athul Shaji, Sri. Abdul Razzak and Sri. S.P. Aravindakshan Pillai and the learned counsel for the appellants and Sri. Bijoy Chandran, the learned Government Pleader for the respondent-State and Sri. D. Kishore. 8. Learned counsel for the appellant-RCC argues that the payments made to the employees while in service were wrong as found by the Committee constituted to look into the anomalies and all that the appellant did was to recover the excess pay given to which they were not entitled. It is also alleged that the employees were aware of the fact that they were drawing excess pay. It is also argued that the decision of the Apex Court in High Court of Punjab and Haryana and others v. Jagdev Singh (2016 KHC 6515) will apply as some of the writ petitioners had executed indemnity bond undertaking to re-pay any excess payment. Since the appellant had only corrected the anomaly that occurred for which they had the power, their action could not be faulted. Since the appellant had only corrected the anomaly that occurred for which they had the power, their action could not be faulted. In such circumstances, it is argued that the decision in Rafiq Masih (supra) will not apply to the writ petitioners while the decision in Jagdev Singh's (supra) and the decision in Chandi Prasad Uniyal v. State of Uttarakhand and others [ 2012(8) SCC 417 ] will apply. 9. Learned counsel for the respondents/writ petitioner argues that the entire action of the RCC in attempting to recover the alleged excess payments after their retirement is bad and cannot be permitted. The appellants had the right to get their pay and terminal benefits fixed on the basis of the last drawn pay. It is their submission that the promotion and the grade pay given were in order and on the basis of the then existing regulations and there cannot be any excess payment as alleged by the appellant. Thus, the indefeasible substantive right obtained by the employees on the basis of the then existing schemes and regulations cannot be altered to their detriment, much less after their retirement. It is their further submission that no notice was ever issued to them before the alleged re-fixation or while lowering their pay scale and that on their superannuation, the employer employee relationship comes to an end and the right to receive pension is a crystallized right as on the date of superannuation on the basis of the pay that existed on that day. As a consequence it is argued that the appellants could not have tinkered with the last drawn pay and consequently the liberty granted by the learned single Judge to the appellant to re-fix the pay with notice is clearly illegal. 10. It is also pointed out on behalf of the respondents that the revision of their pay from 1991 onwards is ordered that too after their superannuation and that has a deleterious effect on their retiral benefits such as monthly pension, gratuity, surrender value of earned leave etc., and recovery of such amounts is plainly illegal and arbitrary apart from being totally inequitable. It is their specific case that employees were never given any amount in excess of their actual entitlement. It is their specific case that employees were never given any amount in excess of their actual entitlement. The action of the respondents in reducing the pay and allowances as aforesaid and without notice is violative of Article 14, 16, 21 and 300A of the Constitution of India, besides being totally against all principles of natural justice, is the further submission. 11. Having considered the rival submissions, we are of the firm view that the action of the appellant in re-fixing the pay and attempting to recover the amounts on the basis of unilateral fixation done without notice to the retired employees is plainly illegal and that part of the judgment of the learned single Judge calls for no interference. The reduction in pay and other retiral benefits without notice vitally affects their pecuniary rights and no action could not have been taken without putting them on notice. By no stretch of imagination can the employer be conceded the power to lower the last drawn pay after superannuation. We declare that the said action to be arbitrary, unfair and unreasonable. 12. As regard the contention of the learned counsel for the appellants that steps were taken to rectify the anomaly on the basis of the findings of the Three member Committee and this was known to the employees and the same could not be implemented because of the resistance on the part of the employees cannot be accepted at all in the absence of any material to substantiate the same. It is not in dispute that proceedings for lowering the pay scale and the last drawn pay which as a consequence affect the other payments due on superannuation were all made after the date of retirement. Learned counsel for the appellant argues on the basis of the judgment in Jagdev Singh (supra) that some of the employees had given undertaking and therefore recovery from them cannot be stalled on the basis of the judgment in Rafiq Masih (supra). We cannot agree with the said submission. The appellant cannot unilaterally decide that the pay granted to the petitioners while in service or any benefit given to the employee while working is wrong without putting the employee to notice. We cannot agree with the said submission. The appellant cannot unilaterally decide that the pay granted to the petitioners while in service or any benefit given to the employee while working is wrong without putting the employee to notice. These are cases where the employees assert that they were given only the pay and allowances due to them for the service they rendered and that they are not in receipt of anything in excess. That apart the undertakings obtained from the petitioner was much later in point of time, and not while sanctioning the fragments allegedly made in excess. 13. The dispute on the actual entitlement ought to have been decided before the retirement when the employer employee relationship subsisted and not thereafter. Since the same was not done, for all purposes the last drawn pay must be reckoned. We have already considered the issue of recovery of the excess payments wrongly paid in our judgment in WA No.310 of 2022, where after considering the decisions in Rafiq Masih and Chandi Prasad Uniyal (supra) it was held that although the employer did have the right to determine and recover excess payments made by mistake or negligence, the question of recovery had to be considered on equitable grounds particularly when it is from Class III or IV employees. In the instant case since no steps were taken before the retirement of the employees, the appellant cannot be permitted to do so relying on the judgment in Chandi Prasad Uniyal (supra). In the present case, the principles noticed in Rafiq Masih (supra) are squarely applicable as rightly held by the learned single Judge and permitting a recovery in such cases would be grossly inequitable. Since we have already held that such a course is impermissible, the direction of the learned single Judge granting liberty to the appellant-RCC to re-fix the pay with notice to the employees has to be set aside. 14. It is trite that on termination of the employment, the employer loses the disciplinary control over the employee and their legal relationship comes to an end except where it is so authorised by the relevant rules. 14. It is trite that on termination of the employment, the employer loses the disciplinary control over the employee and their legal relationship comes to an end except where it is so authorised by the relevant rules. We are also in complete agreement with the judgment of this Court in Suresh Chandran (supra), where a coordinate Bench has held that the re-fixing of the pay after retirement and to recover excess the amount allegedly paid to the employee from his terminal benefits based on a rectification committee report, is arbitrary and unreasonable and in violation of the principles of natural justice. Since we have already held that the recovery itself is bad in the instant cases, it follows that the last drawn pay of the employees cannot be altered/lowered and no refixation is permissible. 15. The decision in Jagdev Singh (supra) relied on by the appellant is clearly distinguishable as that was a case where the officer while opting for the revised pay scale contemporaneously furnished an undertaking to the effect that he would be liable to reWA fund any excess payment to him and therefore he was bound by the undertaking. The said decision therefore cannot have any application in the facts of the present case. Recovery in the instant case, as stated earlier, is completely barred going by the principles in Rafiq Masih (supra) more so, as in this case the argument of the appellant that there has been wrong payment made itself is thoroughly disputed by the employees. The result of our discussion leads to the following conclusions:- (1) It is declared that the appellant-RCC is not entitled to recover any amount as excess payments allegedly paid to the writ petitioners from their retiral benefits. (2) We also declare that the RCC is not entitled to re-fix the pay of its employees by altering or lowering the last drawn pay after their superannuation. (3) The retiral benefits or the amounts withheld from the writ petitioners will be paid to them within a period of six weeks from today, failing which it will carry an interest at the rate 6% from the date it is due till actual payment. Accordingly, we dismiss WA Nos. 869 /2022, 670/2022, 676/2022, 680/2022, 761/2022, and 762/2022 and allow WA No.52 of 2022. We also allow WA Nos.790 of 2022 and 791 of 2022 as well as WP(C) Nos. Accordingly, we dismiss WA Nos. 869 /2022, 670/2022, 676/2022, 680/2022, 761/2022, and 762/2022 and allow WA No.52 of 2022. We also allow WA Nos.790 of 2022 and 791 of 2022 as well as WP(C) Nos. 23086 of 2020 and 3294 of 2021, accordingly.