Shamim Ahmad vs Union Of India

1.The applicant had worked as a Junior Accounts Assistant, which is a Group-C post in the Ministry of Railways. He superannuated on 31.08.2004 while working in the scale of Rs.4500-7000. At that time his last salary was Rs.5250/- p.m. Pension Payment Order (PPO) was issued accordingly on 08.09.2004 and the pension was fixed at Rs.3910/- p.m.

With introduction of 6th Central Pay Commission (CPC) w.e.f. 01.01.2006, Department of Pension and Pensioners Welfare (DOP&PW) issued OM dated 01.09.2008 indicating how to fix the pension for pre 01.01.2006 pensioners. This was adopted by the Ministry of Railways vide their circular dated 08.09.2008. The applicant pleads that he was being paid pension accordingly. Formal orders for revised pension was revised in the corresponding scale of Rs.5200-20,200 with GP Rs.2800 vide PPO dated 25.07.2014 and for the month of May 2015 pension credited was Rs.18,823/-. However, an amount of Rs.1 lakh was deducted from his bank account on 29.05.2015 under the plea "pension recovered as excess paid in past" and thereafter he was paid a pension of Rs.8448/- p.m. w.e.f. June 2015 onwards.

On enquiry, applicant was told that an excess amount of Rs.4,90,423/- has been paid to him as excess pension on account of wrong fixation by the paying bank w.e.f. 01.01.2006 and this amount is required to be recovered. Out of this, Rs.1 lakh was recovered on 29.05.2015 and the balance shall also be recovered in easy instalments in due course.

The applicant is aggrieved that in terms of the judgment by Apex Court in State of Punjab and others vs. Rafiq Masih (White Washer) and others, (2015) 4 SCC 334, recoveries are not permissible as the applicant has not misrepresented at any stage and the excess payments, if at all, occurred over a long duration. Applicant also relies on many other judgments as follows:

(a) Rajendra Singh vs. Union of India & ors., WP (C) 47/2017 of Hon‟ble High Court of Delhi dated 21.08.2017.

(b) Asst. General Manager, State Bank of India and another vs. P.S.Vasudevan Pillai and others, OP (CAT) No.10/2018 decided on 17.01.2018 by Hon‟ble High Court of Kerala.

(c) Asitosh Bhattacharya vs. State of West Bengal, (2015) 2 CLT 339 of Hon‟ble High Court of Calcutta.

(d) Shiba Rani Maiti vs. State of West Bengal, 2017

(4) SLR 426 (Cal.) of Hon‟ble High Court of Calcutta.

(e) Guru Sharan Srivastava vs. Union of India & ors., OA No.3187/2015 decided on 04.05.2018 by Principal Bench of this Tribunal.

(f) Narender Sharma vs. Govt. of NCT of Delhi & ors., OA No.3893/2016 decided on 08.05.2018 by Principal Bench of this Tribunal.

(g) Saramma John Mathai vs. Union of India, OA No.147/2013 of Mumbai Bench of this Tribunal.

(h) Peethambram vs. UOI, OA No.1187/2012 of Ernakulam Bench of this Tribunal.

(i) Satnam Singh & Anr. vs. CMD, MTNL & Anr., OA No.2086/2016 of Principal Bench of this Tribunal.

(j) K.D.Kaushal vs. UOI, OA no.1649/1998 decided on 09.02.1999 by Principal Bench of this Tribunal.

(k) T.Natarajan, Junior Engineer vs. UOI & ors., OA No.180/00651/2015, 2017 (2) CAT AISLJ 124 by Ernakulam Bench of Tribunal decided on 17.01.2017.

Applicant also drew attention to Rule 90 of Railway Service (Pension) Rules, 1993 which is extracted as under:

"(1) Subject to the provisions of rules 8 and 9 pension once sanctioned after final assessment shall not be revised to the disadvantage of the railway servant unless such revision becomes necessary on account of detection of a clerical error subsequently.

Provided that no revision of pension to the disadvantage of the pensioner shall be ordered by the Head of Office without the concurrence of the Railway Board if the clerical error is detected after a period of two years from the date of sanction.

(2) For the purpose of sub-rule (1), the retired railway servant concerned shall be served with a notice by the Head of Office requiring him to refund the excess payment of pension within a period of two months from the date of receipt of notice by him.

(3) In case the railway servant fails to comply with the notice, the Head of Office shall, by order in writing, direct that such excess payment shall be adjusted in instalments by short payments of pension in future, in one or more instalments, as the Head of Office may direct."

Feeling aggrieved at the recoveries and reduction of pension, the applicant had preferred the instant OA seeking to quash the recoveries, refund the alleged excess payments which are already recovered. Interim relief was also sought for staying the recoveries. This interim relief was granted by the Tribunal vide order dated 25.09.2017.

Respondents No.1 & 2 are the Ministry of Railways and respondents No.3 & 4 are the pension paying bank. The respondents have opposed the OA. It was pleaded that those who were serving the Government during the currency of 5th CPC (01.01.1996 to 31.12.2005) fall in two categories, namely,

(a) Those who retired upto 31.03.2004. These employees were getting basic pay only.

(b) Those who retired between 01.04.2004 to 31.12.2005. These employees were in receipt of basic pay as well as dearness pay which was equal to 50% of their basic pay.

Accordingly, the method of revision of their pension under 6th CPC as per OM dated 01.09.2008 was different. The instructions for revision of pension as per 6th CPC were issued by DOP&PW vide their OM dated 01.09.2008. The relevant part of this OM is reproduced below:

"4.1 The pension/family pension of existing pre-2006 pensioners/family pensioners will be consolidated with effect from 1.1.2006 by adding together:-

i. The existing pension/family pension.

ii. Dearness Pension, where applicable

iii. Dearness Relief upto AICPI (IW) average index 536 (Base year 1982=100) i.e. @ 24% of Basic Pension/Basic family pension plus dearness pension as admissible vide this Department‟s O.M.

No.42/2/2006-P&PW(G) dated 5.4.2006

iv. Fitment weightage @ 40% of the existing pension/family pension.

Where the existing pension in (1) above includes the effect of merger of 50% of dearness relief w.e.f. 1.4.2004, the existing pension for the purpose of fitment weightage will be re-calculated after excluding the merged dearness relief of 50% from the pension.

The amount so arrived at will be regarded as consolidated pension/family pension with effect from 1.1.2006."

Further, as per instructions prevalent at the time of superannuation of the applicant, the average emoluments of the previous ten months were to be taken for the purpose of arriving at pension. During this period of ten months, the applicant had drawn for first three months Rs.5,125/- as basic pay and Rs.2562.50 as dearness pay and for the remaining seven months he was getting Rs.5250/- as basic pay and Rs.2625/- as dearness pay. On this basis the average emoluments were worked out to Rs.7818.75 p.m. Accordingly, his pension was fixed at Rs.3910/- p.m. and the PPO dated 01.09.2004 was issued.

On implementation of 6th CPC, the OM dated 01.09.2008 also had a table as Annexure-1 wherein the concordance for revising the consolidated pension was also indicated. The relevant part of this Annexure-1 is reproduced below:

Basic Pay (pre2006) without Dearness pay in (Rs.)

Basic Pay (pre2006) with Dearness pay in (Rs.)

Revised consolidated pension in (Rs.)

(1)

(2)

(3)

2605

3908

5888

2606

3909

5891

2607

3911

5893

3910

5865

8837

Accordingly, since dearness pay was already accounted for and was added while working out average emoluments (para 7 supra), column 2 of the above table becomes relevant and for the pension of Rs.3910/- p.m., the revised pension works out to Rs.5891/- as shown in column 3 above. This is what has been shown in the revised PPO also which was issued on 25.07.2014.

The pension paying bank, however, pleaded that the instructions for revision of pension were to be implemented by the banks in the year 2008 itself. While doing such a revision, the bank has erroneously entered the date of retirement as 31.08.2000 instead of 31.08.2004. Accordingly, Column 1 of the above table (para 8 supra) became wrongly applicable and the pension of the applicant was erroneously revised to Rs.8837/- p.m.

The bank also pleaded that the monthly payment of pension are being regularly advised to all recipients and as such the applicant was fully aware of the payments being received. Being an ex-employee of Accounts Department, the applicant is likely to be aware of the provisions of DOP&PW OM dated 01.09.2008 as well as Ministry of Railway‟s letter dated 08.09.2008. However, the applicant made no effort to advise the bank.

Be that as it may, on receipt of revised PPO issued by Railways on 25.07.2014, this error came to light and accordingly, the excess payment of pension, which had continued from January 2006 to May 2015, was rectified w.e.f. June 2015 onwards. During this period, it was calculated that an amount of Rs.4,90,423/- was paid in excess.

The attention of the Tribunal was also drawn to an undertaking, given by the applicant on 07.10.2004, at the time of starting of pension. This undertaking is to the effect that any excess payment can be recovered from the applicant. Accordingly, Rs.1 lakh was recovered on 29.05.2015 and the balance was being recovered in instalments not exceeding 1/3rd of the currently payable pension.

The respondents have also drawn attention to a Master circular on disbursement of Government pension by Agency Banks issued by RBI on 01.07.2017 and para 12 of this circular reads as under:

"Recovery of excess/wrong payment made to a pensioner

Details of the uniform procedure evolved for recovery of excess/wrong payments made to pensioners drawing pensions under the Scheme for payment of pension to Central/Civil/Defence/Railways pensioners through agency banks, are given below:

a) As soon as the excess/wrong payment made to a pensioners comes to the notice of the paying branch, the branch should adjust the same against the amount standing to the credit to the pensioner‟s account to the extent possible including lump sum arrears payment.

b) If the entire amount of overpayment cannot be adjusted from the account, the pensioner may be asked to pay forthwith the balance amount of overpayment.

c) In case the pensioner expresses his inability to pay the amount, the same may be adjusted from the future pension payments to be made to the pensioners. For recovering the overpayment made to pensioner from his future pension payment in instalments 1/3rd of net (pension + relief) payable each month may be recovered unless the pensioner concerned gives consent in writing to pay a higher instalment amount.

d) If the overpayment cannot be recovered from the pensioner due to his death or discontinuance of pension then action has to be taken as per the letter of undertaking given by the pensioner under the scheme.

e) The pensioner may also be advised about the details of over payment/wrong payment and mode of its recovery."

Therefore, the respondents have pleaded that the applicant had given an undertaking at the stage of starting pension and was also given a notice for recovery and it is only after the said notice, that recoveries have been effected to and that they have the necessary authorisation of RBI to effect the said recoveries.

The respondents also drew attention to certain judgments as under wherein the process of recovery by the disbursing banks has been upheld. One of these judgments is by Hon‟ble Apex Court in High Court of Punjab and Haryana vs. Jagdev Singh, (Civil Appeal No.3500 of 2006, judgement dated 29.07.2016. The following observation in para 11 of this judgment sums up the position :

"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."

Respondents also relied on the case of Chandi Prasad Uniyal and ors. Vs. State of Uttaranchal, (2012) 8 SCC 417, decided on 17.08.2012, wherein the Hon‟ble Apex Court had made the following question for adjudication:

The question that arises for consideration in this appeal is whether over-payment of amount due to wrong fixation of 5th and 6th pay scale of teachers/principals based on the 5th Pay Commission Report could be recovered from the recipients who are serving as teachers. The Division Bench of the High Court rejected the writ petition filed by the appellants and took the view that since payments were effected due to a mistake committed by the District Education Officer, the same could be recovered. Aggrieved by the said judgment, this appeal has been preferred."

Thereafter, the Hon‟ble Apex Court has decided as under:

"18. Appellants in the appeal will not fall in any of these exceptional categories, over and above, there was a stipulation in the fixation order that in the condition of irregular/wrong pay fixation, the institution in which the appellants were working would be responsible for recovery of the amount received in excess from the salary/pension. In such circumstances, we find no reason to interfere with the judgment of the High Court. However, we order the excess payment made be recovered from the appellant‟s salary in twelve equal monthly installments starting from October 2012. The appeal stands dismissed with no order as to costs. IA Nos.2 and 3 are disposed of."

Respondents also relied on the judgment of High Court of Madhya Pradesh titled Ratan Bai Gehlot vs. State of Madhya Pradesh, WP No.3730/2009 decided on 22.03.2010. This judgment has also allowed the recovery of the excess payment.

Further, in the case of Lt. Col. R.C.Setia vs. State Bank of India, CWP No.4179/2016 decided on 08.11.2017, High Court of Rajasthan Bench at Jaipur has also allowed the recovery of the excess payment even if the recipient of excess amount has not played any part in such wrong payment in past.

Reliance has also been placed on the order of Chandigarh Bench of this Tribunal titled Jaswinder Kaur vs. Union of India, OA No.060/00636/2015 decided on 23.05.2016 of Chandigarh Bench of this Tribunal and on Umed Raj Singhvi vs. Union of India, OA No.290/00305/2015 decided on 05.04.2016 of Jodhpur Bench of this Tribunal.

In all these cases, the recovery of excess payment was upheld even though the recipient was not at fault.

In view of the foregoing, respondents pleaded that the OA is required to be dismissed.

Matter has been heard at length. Sh. G.S.Lobana and Sh. Basab Sengupta, learned counsel represented the applicant and Sh. Krishna Kant Sharma, learned counsel represented respondents No.1 & 2 Sh. Khushhal Mohal, learned counsel represented respondents No.3 & 4.

It is admitted by the pension paying bank that the pension fixation of the applicant w.e.f. 01.01.2006 was done wrongly. However, this error was inadvertent. When this error came to their notice, it was corrected and correct pension is being disbursed with effect from June 2015 onwards. In view of the reasons brought out in para 10 above, this reasoning is accepted.

A close reading of the RBI instructions and specifically para (e) thereof (para 12 supra) makes it compulsory for paying bank to issue a prior notice to the applicant for making any recovery for such excess payments and obtain his consent. In the instant case, this requirement has not been fulfilled. Therefore, the action of the bank in making recoveries to the extent of Rs.1 lakh in one instalment on 29.05.2015 cannot be accepted and is set aside. The paying bank is directed to credit this amount to the applicant‟s bank account within a period of one week from the date of receipt of certified copy of this order. In addition as sum of Rs.2000/- will also be paid as compensation. It is also directed that this amount will not carry any interest.

In respect of the excess payment and recoveries thereof, it is the Rafiq Masih judgment (para 3 supra) which has been relied upon in many other cases. This judgment has also made very important observation in para 6 and 7 of the same. These are reproduced below:-

"6. In view of the conclusions extracted hereinabove, it will be our endeavour, to lay 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. In our considered view, the instant benefit cannot extend 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 judgments rendered by this Court, we are of the view, 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 order to ascertain the parameters of the above consideration, and the test to be applied, reference needs to be made to situations when this Court exempted employees from such recovery, even in exercise of its jurisdiction under Article 142 of the Constitution of India. Repeated exercise of such power, "for doing complete justice in any cause" would establish that the recovery being effected was iniquitous, and therefore, arbitrary. And accordingly, the interference at the hands of this Court." The Hon‟ble Supreme Court also expressed its concern for the employers, in case the monetary benefit has been wrongfully extended to an employee. In other parts of this judgment, it is also mentioned that directions issued in the interest of equity in exercise of jurisdiction under Article 142 of the Constitution of India cannot be treated as the basis in all such cases. As many as five instances where recovery is impermissible, were mentioned by Hon‟ble Apex Court, and they were said to be not exhaustive.

In this context, it is the view of this Tribunal that even though there was no misrepresentation on his part, the applicant is likely to have been aware, he being from Accounts department itself, when the pension revision instructions were issued on 01.09.2008. Since the concordance tables were given in Annexure-1 of this very OM, it would not have been very difficult for him to understand that an excess amount of pension is being paid to him and thereafter, bring it to the notice of bank for correction. However, in the event this was not done.

In instant case, three parties are presently before us, namely, the recipient pensioner as applicant, the paying department as respondent No.1 & 2 and the paying bank as respondent No.3 & 4. However, this Tribunal is aware that pressure on the public resources, from which such pensions are actually being paid, is also to be kept in view.

On consideration of the issues involved in this OA, it is felt that it does not fall into any of the five categories mentioned in the said judgment [Rafiq Masih (para 3 supra)]. Though the continued payment of higher pension to the applicant w.e.f. 01.01.2006, was not on the basis of any misinformation by the applicant, he cannot be permitted to enrich himself from the limited public resources. It is also noted that the difficulty, in the context of recovery from the applicant, is also substantially mitigated now on account of the fact that the pension payable to the applicant has been substantially increased in the recent past under the 7th CPC, which has come into effect from 01.01.2016.

In view of foregoing, this OA is disposed off with following direction:-

(i) The amount of Rs.1,00,000/- recovered by bank, on account of excess under question, shall be credited to his account within a week of receipt of certified copy of this judgment.

(ii) The pension paying bank shall also pay an amount of Rs. 2000/- as compensation within eight weeks, for making deductions from his account without prior consent of applicant.

(iii) A detailed monthwise statement shall be issued by the bank to the applicant indicating therein the

"dues", "drawn" and "excess" and also seeking his consent for recovery. The amount already recovered in monthly instalments, till it was stayed, shall also be accounted for and net recovery worked out.

(iv) In case consent is not received within four weeks of having supplied the statement as at (iii) above, the balance amount to be recovered shall be recovered thereafter in interest free easy instalments not exceeding 20% of his current pension till it is fully recovered.

There shall be no order to costs.