IN THE HIGH COURT OF ALLAHABAD
SALIL KUMAR RAI, SURENDRA SINGH-I, JJ.
State Of U.P. And Others – Appellants
Versus
Suresh Chandra Asthana, S/o. S.N. Lal Asthana - Respondent
Special Appeal No. 717 Of 2023
Decided On : 03-11-2023
Recovery of Excess Payment - Government Employee - Payment of Gratuity Act 1972 - Section 13
Fact of the Case:
The case involved a dispute over the recovery of excess arrears of salary paid to a government employee in compliance with the 6th Pay Commission recommendations. The employee, who retired on 31.10.2019, contested the recovery of the amount from his gratuity, arguing that it was not permissible under the Payment of Gratuity Act 1972.
Finding of the Court:
The court found that the recovery of the arrears of 6th Pay Commission from the employee's gratuity was illegal and directed the amount to be refunded to the employee. The court relied on various judgments, including the State of Punjab and others Vs. Rafiq Masih, to support its decision.
Issues: The key issues revolved around the legality of recovering excess payments from a retired government employee's gratuity and the applicability of the Payment of Gratuity Act 1972 in this context.
Ratio Decidendi: The court held that the recovery of the arrears of 6th Pay Commission from the employee's gratuity after his retirement was impermissible under the law, citing Section 13 of the Payment of Gratuity Act 1972. The court also referred to various judgments to support its decision, emphasizing that recovery from retired employees or employees due to retire within one year of the order of recovery is impermissible.
Final Decision: The court dismissed the special appeal, affirming the judgment and order dated 24.6.2023 passed by the learned Single Judge in Writ-A No. 33297 of 2013, and directed the refund of the deducted amount from the employee's gratuity.
JUDGMENT :
(Surendra Singh-I, J.)
1. This special appeal has been instituted against the order dated 26.4.2023 passed by learned Single Judge in Writ-A No. 33297 of 2013 (Suresh Chandra Asthana, S/O, S. N. Lal Asthana Vs. State Of U.P. And 3 Others). Vide impugned order, the learned Single Judge has directed the appellant no.2, Commissioner, Rural Development to refund the amount deducted from gratuity dues to the respondent-petitioners.
2. The writ petition was filed by the respondent-petitioner for quashing the order dated 31.10.019 passed by the respondent no.2 Project Director, District Rural Development Authority, Chandauli (hereinafter referred as ‘DRDA’). By the aforesaid order, Project Director passed an order for recovery of excess arrears of salary paid to the respondent-petitioner.
3. The writ petition was filed by the petitioner Surendra Chandra Asthana with the following prayer :-
ii. issue a writ, order or direction in the nature of certiorari calling for the records and quashing the impugned orders dated 15.11.2011, 19.06.2013 (so far as it relates to petitioner) and 31.10.2019 passed by the respondent nos. 2 and 3 respectively (Annexure Nos. 4,5 and 6 to the writ petition)"
4. The averments made by the petitioner-respondents in the affidavit filed in support of the writ petition that the petitioner was posted in the Pay-scale of Rs. 8000-13500 (pre revised) as Assistant Engineer DRDA Chandauli in terms of the order dated 7.4.2000 issued by the Government of U.P. Rural Development, Lucknow (Annexure no.1). The petitioner by virtue of his services rendered to the Government was granted revised pay-scale in terms of the recommendation of 6th Pay Commission. The amount of aforesaid arrears of pay was paid to the petitioner in terms of the relevant rules admissible for implementation of recommendation of 6th Pay Commission. No misrepresentation or fraud was played by the petitioner to get the arrears of amount of 6th Pay Commission.
5. It has been averred that the Commissioner Rural Development, U.P. sent a proposal for grant of Rs. 44,56,620/- to the State Government vide its letter dated 13.11.2011 for payment of arrears of salary to the employees of DRDA on the implementation of the recommendation of 6th Pay Commission. On rejection of this proposal granted by the Government, a direction was issued by the Commissioner, Rural Development to the Project Director, District Rural Development Agencies to make recovery of arrears which has already been paid to the employees. The Commissioner Rural Development, Government of U.P. has issued a letter dated 15.11.2011 to all the Chief Development Officer/Executive Director, Project Director, District Development Agencies , U.P. to make recovery of the arrears paid to the employees on the recommendation of 6th Pay Commission. The above order passed by the Commissioner Rural Development dated 15.11.2011 was stayed by this Court vide orders dated 16.3.2012, 27.2.2012, 28.5.2012 and 27.3.2012 passed in Service Single No. 1339 of 2012 (Akhilesh Chandra & 2 Ors. Vs. State of U.P. Through Prin. Secy. Rural Development Lko.& Ors.), Service Single No. 1064 of 2012 (Raghupal Singh & 3 Ors. Vs. State of U.P. Through Prin. Secy. Rural Development Lko.& Ors.), Service Single 1109 of 2012 (Virendra Kumar Verma & 22 Ors Vs. State of U.P. Through Prin. Secy. Rural Development) and Writ- A No. 15064 of 2012 (D.D. Gupta & Ors Vs. State of U.P. & Ors.) respectively (Annexure No. 2 to the writ petition).
6. The Authorities of DRDA did not recover the amount of arrears paid to their employees in view of the orde
State of Punjab and others Vs. Rafiq Masih (Whitewasher) and Others
Sayed Abdul Qadir Vs. State of Bihar reported in (2009) 3 SCC 475
The central legal point established in the judgment is that recovery of excess payments from a retired government employee's gratuity is impermissible under the Payment of Gratuity Act 1972, particul....
Recovery of excess payments from employees without their fault violates principles of equity and fairness, especially when recovery occurs post-retirement and after a significant period.
Withholding gratuity post-retirement without notice or opportunity to contest alleged incorrect pay fixation is impermissible and deemed harsh.
Recoveries from retired employees based on erroneous salary payments are impermissible, emphasizing equitable treatment and judicial discretion in enforcing employee rights.
The principle of estoppel applies when a party has executed an undertaking agreeing to recovery of excess payment, and the court may rely on established legal principles to support its decision.
Recovery of excess payment from retired employees is impermissible after five years unless a valid undertaking exists; arbitrary recovery orders are quashed.
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