Ram Baksh Dwivedi @APPELLANT @ Hash State of Madhya Pradesh And Others

By the instant petition filed under Article 226 of the Constitution of India, the petitioner is seeking following relief:-

“(i) to call for the entire record relating to his service and also General Provident Fund Pass Book from the Office of Respondent No.5.

(ii) to call for the entire record from the office of respondent no.4 relating to payments made and deductions of General Provident Fund.

(iii) to quash and set aside the order impugned dated 08.8.2012 (Annexure P-3).

(iv) Any other relief that the Hon’ble Court finds fit and proper in the circumstances of the case.”

However, from perusal of impugned order dated 08.08.2012 (Annexure-P/3), it reflects that a recovery of Rs.1,03,343/- has been shown from the petitioner and it is proposed that the same be recovered from the salary of the petitioner started in the month of August, 2012.

It is claimed by the petitioner that the said recovery is outcome of erroneous calculation made by the respondents and error committed by the officials of the department, therefore, the same cannot be done from him. It is submitted that the passbook of General Provident Fund of the petitioner is kept with the respondents and there is regular deduction of the amount of GPF from the salary of the petitioner and if any excess payment is made to the petitioner and in the account minus balance is shown, the said amount cannot be recovered from the petitioner because there is no false representation on the part of the petitioner and if any mistake has been committed by the respondents, the petitioner cannot be held responsible for the same.

The respondents have filed their reply stating therein that as per the provisions of rules i.e. known as M.P. General Provident Fund Rules, 1955 (hereinafter referred to as the ‘Rules, 1955’), the account is maintained in the office of respondents and passbook of the petitioner is also available with him so as to maintain each and every entry of withdrawal of the amount, but for some reason proper entries have not been made by the respondents. It is also stated by the respondents that the petitioner is working as Upper Division Teacher in the Tribal School Education Department. The GPF account slip of the petitioner was issued for the year ending 31.03.2012 showing closing balance as minus, amounting to Rs.1,03,343/- for the GPF account bearing No.MD/NMP/60725. The petitioner was also given a notice and he had submitted representation which was properly replied by the respondents showing as to how mistake had been committed.

It is further stated in the reply that the balance of GPF account is calculated in terms of the provisions of Rules, 1955 and if any payment is drawn in excess to the amount credited in the said account, the same can be recovered as per the provisions of Rule 14(7) of Rules, 1955. To substantiate the drawal of the amount from the GPF account of the petitioner, the respondents have annexed the calculation-sheet as Annexure-R-4/8 and entries made in the said ledger are authentic entries as compare to the entries shown in the GPF passbook maintained by the petitioner or the department. Thus, the recovery if any is proposed and has been made by the respondents because of missing entries of drawal of amount from GPF account, it cannot be said to be illegal as there is specific provision i.e. Rule 14(7) of Rules, 1955 which provides as to how recovery can be made from the employee. For the purpose of convenience, Rule 14(7) of Rules, 1955 is quoted hereinbelow:-

“In case a subscriber is found to have drawn from the fund an amount in excess of the amount standing to his credit on the date of the drawal, the overdrawn amount, irrespective of whether the over drawal occurred in the course of an advance or a withdrawal or the final payment from the fund, shall be repaid by him with interest thereon, in one lump sum, or in default, be ordered to be recovered, by deduction in one lump sum, from the emoluments of the subscriber. If the total amount to be recovered is more than half of the subscriber’s emoluments, recoveries shall be made in monthly installments of moieties of his emoluments till the entire amount together with interest, is recovered. For this rule, the rate of interest to be charged on overdrawn amount would be 21/2% over and above the normal rate of Provident Fund balances under sub-rule (1). The interest realized on the overdrawn amount shall be credited to Government account under a distinct sub-head “Interest on overdrawn from Provident Fund”]”.

There are decisions in this regard that recovery of drawal of excess amount and the missing entries of the GPF account cannot be equated with other recoveries and the said recovery cannot be quashed only on the ground that it is the fault of the respondent/department. The Division Bench of this Court in a case reported in [2017(2) M.P.L.J. 673] parties being Ramnarayan Sharma Vs. State of M.P. and others, has observed as under:-

“5. Before adjudication, it would be appropriate to quote relevant provisions which have bearing on the issue involved:—

Rule 14(7) and Rule 29 of the M.P. General Provident Fund Rules (for brevity GPF Rules) are as follows:—

“Rule 14(7). In case a subscriber is found to have drawn from the fund an amount in excess of the amount standing to his credit on the date of the drawal, the overdrawn amount, irrespective of whether the over-drawal occurred in the course of an advance or a withdrawal or the final payment from the fund, shall be repaid by him with interest thereon, in one lump sum, or in default, be ordered to be recovered, by deduction in one lump sum, from the emoluments of the subscriber. If the total amount to be recovered is more than half of the subscriber's emoluments, recoveries shall be made in monthly instalments of moieties of his emoluments till the entire amount together with interest, is recovered. For this rule, the rate of interest to be charged on overdrawn amount would be 2% % over and above the normal rate of Provident Fund balances under sub-rule (1). The interest realised on the overdrawn amount shall be credited to Government account under a distinct subhead “Interest on overdrawn from Provident Fund.”

Final withdrawal of accumulations in the fund:— when a subscriber quits the service, the amount standing to his credit in the Fund shall become payable to him:

Provided that a subscriber who has been dismissed or removed from the service and is subsequently reinstated in the service, shall, if required to do so by Government, repay any amount paid to him from the Fund in pursuance of this rule, with interest thereon at the rate provided in rule 14 in the manner provided in the proviso to the Rule 30. The amount so repaid shall be credited to his account in the Fund.

Note 1-A subscriber, re-employed in Government service after retirement, is considered to have quitted service from the date of retirement, even though his re-employment may have been in continuation of his active service without break.

Note 2-A subscriber cannot be considered to quit Government service finally when he resigns service under one Government to take up service under another or when he transfers his service from one branch of Government to another. Consequently, a subscriber to any Provident Fund is not entitled to the refund of his deposits in such circumstances if the rules governing the Provident Fund do not permit of the final withdrawal of deposits until he has quitted Government service. In such cases interest shall be calculated under Rule 14(4) and the amount together with interest shall be transferred.

Note 2-A:— In respect of calculation of interest and final payment of General Provident Fund money at his credit, the Government servant resigning Government service to take up appointment under a body corporate, owned or controlled by Government, will be subject to the provision of note 2 above, if that body maintains a fund and agrees to such transfer.

Note 3:— When a non-gazetted subscriber retires, resigns, dies or is dismissed or removed from service or proceeds on leave preparatory to retirement, the head of the office should immediately report the fact to the Account Officer and submit the claim for final payment of Provident Fund money at his credit to the Account Officer in the form prescribed in the Fifth Schedule. The same form should be used also for claims of withdrawal of Provident Fund money of a Gazetted Officer. If any of the particulars or documents required cannot be furnished at once they should be sent as early thereafter as possible but the report of the event should not be delayed on that account.

Rule 65 and Rule 66 of the M.P. Civil Services (Pension) Rules, 1976, (for brevity “1976, Rules”) are as follows:—

“65. Recovery and adjustment of Government dues. — (1) It shall be the duty of every retiring Government servant to clear all Government dues before the date of his retirement.

(2) Where a retiring Government servant does not clear the Government dues and such dues are ascertainable:—

(a) an equivalent cash deposit may be taken from him; or

(b) out of the gratuity payable to him, his nominee or legal heir, an amount equal to that recoverable on account of ascertainable Government dues shall be deducted.

Explanation-1. The expression “ascertainable Government dues” includes balance of house building or conveyance advance, arrears of rent and other charges pertaining to occupation of Government accommodation, over-payment of pay and allowances and arrears of income-tax deductible at source under the Income-tax Act, 1961 (No. 43 of 1961).

“66. Furnishing of surety by retiring Government servant.

— (1)(a)

If any of the Government dues (other than those referred to in rule 65 remain unrealised and unassessed for any reasons, the retiring Government servant may be asked to furnish in Form 8 a surety of a suitable permanent Government servant, holding a pensionable post.

(b) If the surety furnished by him is found acceptable the grant of his pension and gratuity shall not be delayed.

(2) (a) If the retiring Government servant is unable or unwilling to furnish a surety, a suitable cash deposit may be taken from him, or such portion of gratuity payable to him as may be considered sufficient may be held over till the outstanding dues are assessed and adjusted.

(b) The cash deposit to be taken or the amount of gratuity to be withheld shall not exceed the estimated amount of the outstanding dues plus twenty-five per cent thereof.

(c) Where it is not possible to estimate the approximate amount recoverable from the retiring Government servant the amount of deposit to be taken or the portion of gratuity to be withheld shall be limited to ten per cent of the amount of gratuity or one thousand rupees, whichever is less.

3(a) Efforts shall be made to assess and adjust the recoverable Government dues within a period not exceeding six months from the date of retirement of the Government servant and, if no claim is made on Government account against the Government servant within such a period it shall be presumed that no Government claim excluding claim of house rent and water charges is outstanding against him.

(b) The Government dues as assessed shall be adjusted against the cash deposit or the amount withheld from the gratuity and the balance, if any, shall be released to the retired Government servant after the expiry of the period referred to in clause (a).

(c) Where a pensioner has furnished a surety, the surety shall be released after the expiry of the period referred to in clause (a) provided the dues assessed up to that time have been recovered.

(4) The Government dues which remain unrealised within the period referred to in clause (a) of sub-rule (3) and such other dues, the claim for which is received after that period, shall be recoverable from the retired Government servant through legal procedure.

Provided that in respect of house rent and water charges, the amount, if any, the claim for which is received after the period of 12 months from the date of retirement of the Government servant shall not be recoverable from the retired Government servant.”

Learned counsel for the petitioner relying on the provisions of Rules 64 and 66 of the Civil Services Pension Rules, 1976 submits that no recovery from gratuity can take place except in accordance with the provisions laid down in the 1976 Rules. It is submitted that Rules 65 and 66 which provide for recovery of Government dues do not empower the State or its functionaries to make any recovery of Government dues from gratuity after expiry of 6/12 months of the date of superannuation.

6.1 In this legal background, it is submitted that action of respondents/authority in recovering the unduly withheld gratuity for balancing the GPF account is uncalled for in law.

On the other hand, learned counsel for the AGMP have supported the action of recovery by contending that the course adopted by the respondents was in line with the provision of Rule 14(7) read with Rule 29 of the GPF rules. Reliance is placed on the Division Bench decision of this Court in the case of Kashi Yadav v. State of M.P., 2016 (3) M.P.L.J. 97.

After hearing learned counsel for the parties, this Court is of the considered view that the present appeal is liable to be allowed as the action of the respondents in adjusting the debit balance of the GPF account from the gratuity amount due to the petitioner after more than two years of superannuation is unsupported by any authority of law for the reasons mentioned infra.

8.1 The GPF rules are framed under the proviso to Article 309 of the Constitution of India for constitution of General Provident Fund and prescribing procedure for depositing, withdrawal, payment of interest and borrowing qua the said GPF.

8.2 The State has referred to Rule 14(7) of the GPF Rules which is reproduced supra. Rule 14(7) contemplates situation that if withdrawal is made from the fund by the subscriber in excess of the amount to his credit on the date of drawal, the overdrawn amount shall be repaid by the subscriber with interest thereon in lump sum or in default shall be recovered by deduction in one lump sum/in instalments from the emoluments of the subscriber.

8.3. Apart from Rule 14(7) in GPF Rules, no other rule governs the field of recovery of over drawn GPF amount. Therefore, this Court will have to fall upon Rule 14(7) forjudging the validity and legality of the order of recovery assailed herein.

8.4. The expression “emoluments” used in Rule 14(7) is not defined in the GPF Rules. However, if assistance of the Pension Rules of 1976 is sought then definition of emoluments is found in Rule 3(1) (d) read with Rule 30, to mean the pay as defined in Rule 9(21) of Fundamental Rules (including dearness allowance pay, if any), which a Government servant was receiving immediately before his retirement or on the date of his death, as the case may be. For ready reference and convenience Rule 3(1)(d) and Rule 30 of the Pension Rules are reproduced below:—

“Rule 3(1)(d) “Emoluments” means emoluments as defined in Rule 30.

Rule 30. Emoluments. — The expression “emoluments” means pay as defined in Rule 9(21) of the Fundamental Rules (including dearness pay, if any, as determined by the order of the Government issued from time to time) which a Government servant was receiving immediately before his retirement or on the date of his death, as the case may be.

Explanation. — (1) For those Government servants who are drawing pay in the revised pay scales, under the Madhya Pradesh Revision of Pay Rules, 1990 or Madhya Pradesh Revision of Pay Rules, 1998 or pay scales of U.G.C. or All India Council of Technical Education or All India Services, the expression ‘emoluments’ means basic pay as defined in Rule 9(21)(a)(i) of the Fundamental Rules, which a Government servant was receiving immediately before his retirement and will also include dearness pay and personal pay, if any, as determined by the order of State Government, from time to time.”

8.5. From the definition of emoluments it becomes clear that the same refers to the pay which a Government servant receives till his retirement. Thus, the expression “emoluments” employed in Rule 14(7) of GPF Rules necessarily implies that the rule making authority had in service Government servant in mind and not a retired Government servant in mind while bestowing power of recovery. Thus, it can safely be concluded that the Provident Fund Rules do not empower in expressed terms recovery to be made for adjustment of debit balance in the GPF account from gratuity.

8.6. The subject of accrual of, calculation of, payment of and recovery from the amount of gratuity of a Government servant is governed by the M.P. Civil Services Pension Rules of 1976.

8.7. Gratuity is defined in Rule 3(1)(i) while recovery of Government dues from gratuity is provided in Rules 65 and 66 which are reproduced supra.

8.8. Rule 65 provides that every retiring Government servant is duty bound to clear all Government dues before retiring failing which the competent authority is empowered to take equivalent cash deposit from the retiring Government servant or recovering the ascertainable Government dues from the amount of gratuity payable. The expression “ascertainable Government dues” have though not been exhaustively defined but few illustrations i.e. house building/conveyance advance, arrears of rent and other charges pertaining to occupation of Government accommodation or over payment of pay and allowances and arrears of income-tax deductible at source under the income-tax Act, are prescribed in Explanation-1 appended to Rule 65 of Pension Rules.

8.9. Rule 66 circumscribes the generic power under Rule 65. The said Rule provides that if any Government dues (other than those referred in Rule 65) remained unrealized and unassessed, surety may be taken from the retiring Government servant and the amount of pension and gratuity should be released without any delay. Rule further provides that in case of inability expressed by retired Government servant to furnish the surety, suitable cash deposit may be taken from him or a portion of gratuity which is sufficient to meet out the standing dues should be withheld. Rule further provides that where the dues are unascertainable then withholding of gratuity should be limited to 10%.

8.10. Clause (3) of Rule 66 emphasizes that the assessment of dues and its adjustment should be completed within a period of six months from the date of retirement and if there is no claim made on Government account against the Government servant within this period then it shall be presumed that no Government claim excluding claim of house rent and water charges are outstanding against him. This sub-rule further provides that in case the dues as ascertainable, the same be adjusted against the cash deposit or the amount withheld gratuity and the balance shall be released in favour of the retired Government servant immediately after six months from the date of retirement.

8.11. Clause (4) of Rule 66 which is relevant herein provides that after completion of exercise of assessing the unascertainable Government dues, if the dues remain unascertained within six months from the date of retirement then recovery can take place from the retired Government servant only through legal procedure barring dues pertaining to house rent and water charges for which period of 12 months instead of 6 months is provided.

8.12. Scheme of Rule 66 can be bifurcated in two parts. The first part pertains to recovery of ascertainable dues and the second of unascertainable dues. In case of ascertainable dues the mode of taking cash deposit or surety or recovery from gratuity at the time of retirement is permissible. However, in case of unascertainable except dues relating to house rent and water charge, period of six months from the date of retirement is provided for the Government to assess and calculate the exact amount of dues. For adopting the same procedure of adjustment against the cash deposit or partly withheld gratuity within the period of six months. Whereas in case of unascertainable dues pertaining to house rent and water charges long period of 12 months is prescribed for completing the process of assessment and calculation.

8.13. After the period of 6 months/12 months from the date of retirement the only mode available for recovering ascertainable and unascertainable Government dues is by taking recourse to legal procedure which means filing the suit for recovery in the Court of competent civil jurisdiction.”

The Division Bench in the said case has further observed that in a case of excess drawal of the amount from the GPF account and recovery of that amount cannot be equated with the recovery as has been considered by the Supreme Court in case of State of Punjab and Ors.vs. Rafiq Masih (White Washer) and ors., 2014 MPLJ Online (S.C.) 6 and has clearly observed that the said case is not applicable in the facts and circumstances of the present case.

Likewise, in a case reported in [2006(3) M.P.L.J. 583] parties being Badri Prasad Sharma vs. State of M.P. and others, this Court considering the respective provision i.e. Rule 14(7) of Rules, 1955 has observed as under:-

“6. The decisions cited by the learned counsel for the petitioners in the cases of State of Karnataka v. Mangalore University Non-teaching Employees' Association, (2002) 3 SCC 302, Sahib Ram v. State of Haryana, 1995 Supp (1) SCC 18, Union of India v. G. Ganayutham (dead) by L.Rs., (1997) 7 SCC 463 : AIR 1997 SC 3387, the decisions of this Court in the case of S.C. Dubey v. State of M.P., 2006 (1) MPWN SN 37 and Chandrakant v. State of M.P., 2005 (11) MPWN SN 74 will not be applicable in the present facts and circumstances of the case. In the case of Sahib Ram (supra), the Apex Court has held that since the date of regularization, the appellant was paid his salary on the revised scale, however, it is not on account of any misrepresentation made by the appellant that the benefit of the higher payscale was given to him, but by wrong construction made by the Principal for which the appellant cannot be held to be at fault. It was further held that under the circumstances, the amount paid till date may not be recovered from the employee concerned.

The question of following natural justice and granting opportunity of hearing has to be considered in the facts and circumstances of each case and it cannot be applied as a thumb rule in each and every case. Whenever a question with regard to grant of opportunity is to be considered by this Court, this Court has to take note of the reasons given for taking a particular action and the requirement of following the principles of natural justice is to be considered in the backdrop of the aforesaid reasons. In doing so, cases differ on facts, and therefore, in each and every case merely because opportunity is not granted, action cannot be held to be illegal.”

In view of the aforesaid, I am also of the view that the amount shown in the impugned order to be recovered from the petitioner as there is excess drawal of amount from the GPF account of the petitioner and minus balance shown in the account, there was nothing illegal because the provision itself provides that the recovery can be made if excess drawal of amount is made from GPF account and respective entries are missing.

If recovery as per the impugned order is already effected and amount is recovered, the same cannot be returned because the said order is held valid.

The petition is misconceived. Accordingly, it is dismissed.