IMPORTANT POINT
Employers must conduct a proper inquiry before imposing salary deductions or recoveries from retirement benefits, ensuring adherence to natural justice principles.

JUDGMENT :

(Ravindra V. Ghuge, J.) :

1. Rule. Rule is made returnable forthwith and heard finally by the consent of the parties.

2. The Petitioner has put forth prayer clause B and C, as under :-

“B. By issuing appropriate writ of mandamus or any other writ in like nature, the impugned order dated 03.08.2018 passed by Respondent No.1 may kindly be quashed and set aside and further Respondents may kindly be directed to pay amount of Rs.31,77,840/- and Rs. 25,90,148/- is recovered from retirement benefit and remaining recoverable amount Rs.5,87,692/- from the pension of the Petitioner with interest as per law within two weeks.

C. By issuing appropriate writ of mandamus or any other writ in like nature, the respondent authorities may kindly be directed to pay differences of increment and payment deducted from the recovered from retirement benefit and remaining recoverable amount of Rs.5,87,692/- from the pension of the Petitioner.”

3. The Petitioner has superannuated as a Development Officer after putting in 33 years of service. He joined on 01.01.1984 and has superannuated on 28.02.2018. On 16.03.2018, after his superannuation, the Respondent Insurance Company issued a notice to the Petitioner for revising the pay scale and reducing the increments already granted. The Petitioner did not respond to the said notice. On 03/08/2018, which is almost after 6 months of his superannuation, the impugned order was passed by the Company informing the Petitioner that his basic salary will be fixed at Rs.15,650/-, by reducing it from Rs.52,000/-, with retrospective effect after implementation of Cost Control Measures. It was further set out in the said order that an amount of Rs.31,77,840/-, will have to be recovered from the Petitioner. The entire amount of Rs.25,90,148/- of his retiral dues, payable to the Petitioner, was adjusted against the recovery. Further action of recovery is thereafter initiated for recovering an amount of Rs.5,87,692/-.

4. The Insurance Company has filed it’s affidavit in reply. It is contended that the amount recoverable from the Petitioner has been fixed at Rs.31,77,840/-. His terminal dues were Rs.25,90,148/-. These dues are adjusted against the amount recoverable. It is further contended that Cost Control Measures were introduced under clause 11 of the Development Officer’s Scheme. Each Development Officer is required to maintain his ‘cost ratio’ within the limits stipulated in Sub Clause ‘C’ of Clause 17 under paragraph 3. If the cost ratio of the Development Officer for a particular performance in a year, exceeds a stipulated limit, such cost that exceeds the limit, is to be adjusted against ‘non-core’ allowances payable to him. If a Development Officer fails to maintain the cost ratio and exceeds the limit for the 3rd successive performance year, he is liable for deduction in his basic pay scale.

5. It is stated in the affidavit in reply that the performance of the Petitioner as a Development Officer, was below the mark. There were several complaints against him regarding the nature of his working. Vide an order dated 23.06.2008, his salary was reduced by 5 increments, which is termed in the affidavit as 5 decrements, in the month of March 2009.

6. It is further contended that on 27.02.2018, which is one day prior to the superannuation of the Petitioner, he was apprised about the cost control analysis for the period 2003-2004 to 2016-2017. The record from 2003 onwards was dug out on 27.02.2018. Considering that the expenditure in the cost ratio was beyond 10%, the Department calculated the recoverable amount of Rs.31,77,840/-. The said communication dated 27.02.2018, was served upon the Petitioner. The Petitioner submits that he received this notice on 28.02.2018, when he was on his way out and superannuated that fore-noon.

7. The learned Advocate for the Company draws our attention to the pleadings in the affidavit in reply, more specifically paragraph No.7, wherein it is stated that the Company deemed that the Peti