Gujarat State Seeds Corporaion Employes Association and Others vs State of Gujarat and Another

A.L. Dave, J.—In this group of petitions, a common question that arises is, whether the payment made to the employees of respondent No. 2 - Corporation could have been ordered to be recovered by giving retrospective effect to withdrawal of certain benefits in pay / remuneration.

The facts leading to present set of petitions can be briefly stated thus:

The petitioners are employees/association of employees of Gujarat State Seeds Corporation Limited, Gandhinagar. Looking to the need of employment, the staff working at the godown of the Corporation was being paid a special additional pay to the extent of 10% of the Basic Pay, which came to be reduced, at a later point of time, to 5%. Somewhere in 1998, there was revision of pay-scales. Pursuant to the revision of pay-scales, the godown allowance being paid to the employees came to be discontinued by an order dated 30.09.1998 (Annexure-B to Spl.C.A. No. 1296/2001). Since the revision of pay came to be effective from 1.1.1996, recovery of godown allowance was ordered for the period from 1.1.1996 to 30.9.1998 vide order dated 20.10.2000 (Annexure-A to Spl.C.A. No. 1296/2001). The recovery was ordered to be made in five equal instalments with effect from November, 2000. The said order was passed unilaterally by the respondent-Corporation and hence these petitions.

Initially, Special Civil Application No. 12193/2000 was filed whereby the operation of the order dated 20.10.2000 came to be stayed by way of interim relief. That petition was filed by one of the employees individually. Later on, Special Civil Application No. 1296/2001 came to be filed by the employees'' Association. This Court, by order dated 27.4.2001 directed that one page petitions in respect of those persons whose names are set out in Annexure-E to the said petition shall be filed on or before 15.6.2001. Somehow, the petitioners missed to file such petitions during the time limit fixed and, therefore, by order dated 17.9.2010, the limit was extended and Special Civil Application Nos. 12401/2010 to 12457/2010 came to be filed. The said petitions are admitted and are heard and are disposed of by this common judgment.

It is clear from the impugned order Annexure-A to the petition that the order was passed on the basis of communications received from the Government dated 19.7.2000 and 10.8.2000. It is obvious that the order was passed without any audience being given to the petitioners. That apart, it is a fact that the godown allowance was being paid to the employees and continued to be paid to the employees till the recommendations of the 5th Pay Commission were accepted somewhere in 1998. The recommendations were, however, made effective from 1.1.1996 and, therefore, during the years 1996, 1997 and part of 1998, the godown allowance continued to be paid to the employees as per the earlier norms. Now, by virtue of adopting the recommendations of the 5th Pay Commission, it was decided, by way of policy, that godown allowance is not to be paid. The petitioners do not challenge that aspect. The challenge is only to the recovery that is sought to be made in respect of payment made in past by applying the order retrospectively, which cannot be done in light of Rule 28 of the Gujarat Civil Services (Pay) Rules, 2002, which runs as under:

Pay when promotion or appointment is found to be erroneous: (1) Notwithstanding the provisions contained in these rules, the pay of a Government employee whose promotion or appointment to a post is found to be or to have been erroneous on the basis of facts, e.g. incorrect seniority, failure to apply any relevant rules or orders correctly, shall be regulated in accordance with the general or special orders issued by the Government in this behalf.

(2) When any rule or order regulating pay is made with retrospective effect, the pay of a Government employee affected by such order or rule, shall be fixed notionally as if the rule or order were applicable in his case, but the Government employee concerned shall not be called upon to refund the resultant amount of overpayment on account of pay and allowances;

Provided that in the case where the erroneous promotion or appointment was given on the basis of false information furnished by the concerned Government employee; departmental action shall be taken against him and the resultant amount of overpayment on account of pay and allowances shall also be recovered from him.

This Rule 28 is pari materia to Rule 57A of the Bombay Civil Services Rules, which was operative at the time when the order in question was passed.

Considering this provision, this Court has prevented the authorities from making recovery of such excess amount paid to the employees by order passed in Special Civil Application No. 10447/2003 on 8.7.2010. A Division Bench of this Court by judgment dated 4.4.2001 in Letters Patent Appeal No. 578/2000 in Special Civil Application No. 2196/1999 has also taken the similar view.

In the above set of circumstances, these petitions deserve to be allowed and are allowed. The order dated 20.10.2000 (Annexure-A to Special Civil Application No. 1296/2001) directing recovery of godown allowances paid to the petitioners during the period from 1.1.1996 to 30.9.1998 is hereby quashed and set aside. Rule is made absolute accordingly. No order as to costs.