Recovery of excess payment due to departmental mistake for a period exceeding five years is impermissible. Violation of Principles of Natural Justice in unilateral actions by the respondents.

ORDER :

The petitioner herein, who was an Assistant Executive Engineer in the respondents- Corporation (Building Department), had retired from the services on 28.02.2009. His entire Death-cum-Retirement Gratuity (DCRG) benefits were withheld by the respondents on the ground that, audit objections and advance adjustments were pending for the year 2001-2002 and 2002-2003. Ultimately, on 29.09.2010, an order came to be passed by the first respondent herein that since the audit objections were pending, his DCRG benefits would be released after closure of the objections. Consequently, on 19.10.2010, the second respondent herein had also passed an order on the same lines. These two orders are challenged in W.P.No.20585 of 2012. Based on the representations given by the petitioner seeking for release of his DCRG benefits, the respondent had sought to recover an alleged excess pay from the petitioner for the period between 01.04.1994 to 28.02.2009 amounting to Rs.80,646/- through the impugned order dated 09.04.2010. This order is put under challenge in W.P.No.26989 of 2012.

2. Heard Mr.P.Manoj Kumar, learned counsel for the petitioner and Ms.P.T.Rama Devi, learned counsel appearing for the first respondent as well as Mr.V.Ravi, learned Special Government Pleader for the second respondent.

3. Since both the Writ Petitions involves withholding the petitioner-s DCRG benefits owing to audit objections, they are disposed of, through a common order.

4. The Hon-ble Supreme Court in the case of State of Punjab and Others V. Rafiq Masih (White Washer) and Others reported in 2015 (4) SCC 334 has held that, recovery of excess payment made owing to the mistake of the department and not due to the fraud or misrepresentation of the employee, for a period in excess of five years, is impermissible in law. This decision was reiterated in a subsequent judgment of the Hon-ble Supreme Court in the case of Thomas Daniel Vs. State of Kerala reported in 2022 SCC Online SC 536. In the instant case, the audit objections relates to the period between 2001 to 2002 and 2002-2003, which is apparently for a period exceeding five years. The Government in G.O. (Ms) No.104, Municipal Administration and Water Supply Department, dated 08.07.2005, had ordered the department heads of the Chennai Corporation to take action for clearing audit objections and advance adjustments one year prior to the retirement of the concerned officer and complete the same before his retirement. In cases of disciplinary action, the amount mentioned could be deducted from the DRCG benefits from the concerned employee and the remaining amount has to be released. Admittedly, no departmental action has been initiated against the petitioner even prior to his retirement and thereafter. By laying down the legal ratio laid down in Rafiq-s case, as well as Thomas Daniel-s case, (supra) and in view of the specific directions of the Government in G.O. (Ms) No.104 dated 08.07.2005 to complete the audit objections and advance adjustments prior to one year of the concerned officer-s retirement, the action initiated by the respondents in withholding DCRG benefits of the petitioner itself, is illegal.

5. In W.P.No.26989 of 2012, the Legal Fund Auditor of the respondents- Corporation has calculated the excess pay given to the petitioner from 01.04.1994 to 01.04.2000, which amount was already recovered from the petitioner-s salary and also recorded in the ledger. While such a specific ground has been raised by the petitioner, the respondents had not objected to the same. When the excess pay has already been recovered from the petitioner-s salary during the year 2000 itself, it would not be permissible for the respondents to recover the excess pay once again, through the impugned order dated 09.04.2010 for the period from 01.04.1994 to 01.04.2000. Since such a payment has already been recovered by the respondents and also that, they have unilaterally revised the basic pay of the petitioner from Rs.30,340/- to Rs.2