Libertatem Magazine

Madhya Pradesh HC: Retiral Dues Not to Be Recovered From Employee if Once Paid Due to Incorrect Pay Fixation

Contents of this Page

In the present case, a petition was filed under Article 226 of the Constitution of India, in which the petitioner has assailed pension payment order as to recovery of Rs. 1, 96, 980/- was concerned, which had been made from the retiral dues of the petitioner. The Court directed that in light of the principle of law laid down by the Supreme Court, that the recovery of an amount from the retiral dues of the petitioner was illegal.

Brief Facts

Brief facts giving rise to the filing of the present petition were that the petitioner was aggrieved by an order of recovery after retirement. The grievance of the petitioner was that neither affording any opportunity of hearing nor issuance of show cause notice, the said amount had been deducted from the gratuity of the petitioner. The petitioner was neither found guilty of any misconduct nor for any offense in the criminal proceedings. The inaction on the part of the respondents is in flagrant violation of principles of natural justice.

Petitioner’s Submissions

The petitioner had superannuated in February 2016. He contended that the number of his retiral dues could not be recovered, even if there was no misrepresentation or fault on the part of the petitioner. The said recovery was done without the prior approval of the Governor which violated the Pension Rules, 1976. He had further contended that the Supreme Court in the case of State of Punjab Vs. Rafiq Masih (White Washer), ( M.P.H.T 130 (SC) had held that no recovery could be affected by the retrial dues of the employee after his retirement. Hence, it was prayed that recovery of Rs.1,96,980/- already made from the retiral dues of the petitioner must be refunded along with interest.

Respondent’s Submissions

The learned State counsel by filing return had contended that originally petitioner was appointed as Constable w.e.f. 02/04/1976 and had been posted in different units in the District Police Force in Shivpuri. 

It was after the implementation of the Revision of Pay Rules, 1990, that the pay of the petitioner was wrongly fixed w.e.f. 01/01/1986 and he continued to receive that payment accordingly, due to incorrect pay fixation. However, after retirement when the service book of the petitioner was forwarded for verification before the Joint Director, Treasury, Accounts, and Pension, on its verification, they had raised objection about incorrect pay fixation and as per them, the pay fixation of the petitioner had been corrected and vide an order dated 25/01/2016, before retirement of the petitioner, correct pay fixation had been done and therefore, amount of recovery of Rs. 1, 96, 980/- was made. Moreover, the petitioner had also given an undertaking that in case any excess amount will be paid to the petitioner, then the respondents would be at liberty to recover the same from him.

Consideration by the Court

The Court considered various aspects, like that the pay of the petitioner was fixed w.e.f. 01/01/1986. There was also no allegation that it was fixed due to any collusion. Moreover, the undertaking given by the petitioner at the time of retirement could not be said to be an undertaking of pay fixation, therefore it was considered that the instant petition deserved to be allowed.

The Hon’ble Supreme Court in the case of Syed Abdul Qadir and others Vs State of Bihar and others (2009) 3 SCC 475, held that the relief against recovery of the excess amount paid to an employee on account of the wrong fixation of pay was granted by the court, not because of any right in the employees, but in the interest of equity, exercising judicial discretion to relieve the employees from the hardship in case recovery will be ordered.

In the case of State of Punjab and Others Vs. Rafiq Masih (White Washer) (supra), few situations wherein recoveries by the employers, would be impermissible in law were summarised as a ready reference, like recovery from retired employees, or employees who would be due to retire within a year of the order of recovery, etc.

Court’s Directions

In light of the principle of law laid down by the Supreme Court, the Court opined that the recovery of an amount of Rs. 1,96,980/- from the retiral dues of the petitioner was illegal. Consequently, the petition was allowed. 

The respondents were directed to refund the amount of Rs. 1,96,980/- to the petitioner within three months. In case, the amount won’t be refunded within the aforesaid period, the same shall carry interest @ 9 % per annum till the date of payment.

Click here to view the original judgment is now on Telegram. Follow us for regular legal updates and judgment from courts. Follow us on Google News, InstagramLinkedInFacebook & Twitter. You can subscribe to our Weekly Email Updates. You can also contribute stories like this and help us spread awareness for a better society. Submit Your Post Now.

About the Author