Summary
The Supreme Court quashed the Bihar Government's reduction of a retired officer's pay scale and its demand to recover alleged excess pay eight years after he retired. The 1999 pay revision Resolution protected time-bound promotions granted before 31 December 1995, as his 1991 promotion was; and the reduction and recovery were in any case punitive, made without notice, and barred after so long a gap.
Issues
- Whether paragraph 11 of the Bihar Government Resolution dated 8 February 1999 ended the appellant's 1991 time-bound promotion from 1 January 1996 so as to justify reducing his pay scale.
- Whether the State could reduce the pay scale and recover alleged excess payments from the appellant eight years after his superannuation, without a show cause notice.
- Whether recovery of the excess amount was permissible in equity given the long lapse of time and the appellant's retirement.
Provisions considered
- Paragraph 11, Government of Bihar Resolution dated 8 February 1999 (pay revision)Read as protecting the status and pay of employees who had received time-bound promotions before 31 December 1995; only promotions given after that date were to be ignored in fixing revised pay. The appellant, promoted in March 1991, was therefore entitled to the revised scale of the promotional post, and the State Government and the High Court misinterpreted the paragraph. (¶¶ 4, 18, 25, 26)
Held
- Paragraph 11 of the Resolution of 8 February 1999 protects the status and pay of employees who received time-bound promotions before 31 December 1995. The appellant's undisputed and regular promotion of 10 March 1991 was therefore protected, and his pay scale could not be reduced on the strength of that Resolution. (¶¶ 18, 25, 26)
- No departmental action could be initiated against the appellant eight years after superannuation, as the employer-employee relationship had ended. The recovery letter's reference to a departmental inquiry was unfounded, since the State's counsel conceded that none was held, and the order to reduce pay and recover was not preceded by any show cause notice, in breach of natural justice. (¶¶ 19, 20)
- A decision to reduce an employee's pay scale and recover excess amounts cannot be applied retrospectively after a long gap. Applying Syed Abdul Qadir, ITC Ltd., Rafiq Masih and Thomas Daniel, recovery of excess payment that was not caused by the employee's fraud or misrepresentation is iniquitous where the payment continued for a long time, particularly from a retired employee. (¶¶ 21, 22, 23, 24)
- Reducing the pay scale of a government employee and recovering money from him amounts to punitive action with drastic civil consequences. Ordering it against an officer promoted in 1991 who had retired eight years before the recovery notice was grossly arbitrary and illegal. (¶ 26)
Result
Appeal allowed; the State Government's order of 8 October 2009 reducing the appellant's pay scale and directing recovery, and the Division Bench judgment of 27 August 2012, quashed; the appellant to continue receiving pension on the higher pay scale, with any reduction or recovery already effected restored or reimbursed with applicable interest; no order as to costs.