Decision To Reduce Pay Scale Can't Be Applied Retrospectively: Supreme Court Quashes Recovery Steps Against Retired Govt Servant

The Supreme Court observed that any step of reduction in the pay scale and recovery from a Government employee would tantamount to a punitive action because the same has drastic "civil as well as evil consequences."A Supreme Court bench of Justices Sandeep Mehta and R. Mahadevan further observed: “Any decision taken by the State Government to reduce an employee's pay scale and recover the excess amount cannot be applied retrospectively and that too after a long time gap.”In this case, after 8 years of retirement, the appellant got a notice from the Bihar Government that they had incorrectly calculated his pay fixation. Therefore, Rs. 63, 765 was sought to be recovered from him.Quashing the recovery steps, the Court said: “Thus, no such action could have been taken against the appellant, more particularly, because he had been promoted as an ADSO [Assistant District Supply Officer], while drawing the pay scale of Rs.6500-10500 applicable to the post, way back on 10th March, 1991 and had also superannuated eight years ago before the recovery notice dated 15th April, 2009 was issued. The impugned action directing reduction of pay scale and recovery of the excess amount is grossly arbitrary and illegal and also suffers from the vice of non-adherence to the principles of natural justice and hence, the same cannot be sustained.”.Brief factsThe Bihar Government appointed the appellant as a Supply Inspector in 1966. After serving 15 years, he received his first time-bound promotion as Marketing Officer on April 1, 1981. Upon completion 25 years of service, he was promoted to Assistant District Supply Officer (ADSO) on March 10, 1991 and he superannuated from this post on January 31, 2001.On February 8, 1999, the Bihar Government revised the pay scale for Marketing Officers from Rs. 1640-2900 to Rs.5500-9000 and for ADSO from Rs. 2000-3800 to Rs.6500-10500 to be effective from January 1, 1996. Paragraph 11 of the February 9 resolution stated: “The State Government have decided to abolish the existing facilities of Time Bound Promotions and Selection Grades, discussed in paras 10 and 12 of F.D. Resolution No.6021 dated 18th December, 1989 and they shall cease to be applicable with effect from 1st January, 1996 and thereafter in the existing pay scales. If any such promotion, however, is due under the Rules before 1st January, 1996, it shall be given and the payment of arrears in the existing scale shall be made only upto 31st December, 1995 after which the promotion would be deemed to have been automatically terminated.”Therefore the appellant's pay scale was revised to Rs. 6500-10500. After retirement, the last pay drawn by the appellant was Rs. 10500 with admissible emoluments. As per the Bihar Pension Rules, 1950, his pension was calculated at 50 percent of the average emoluments and was quantified at Rs. 5247 per month. However, on January 28, 2003, the Accountant General of the Bihar Government raised object to the March 10, 1991 promotion granted to the appellant. He alleged that the promotion would be ineffective from January 1, 1996 by the government's resolution dated February 8, 1991. Therefore, it was claimed that the pay scale has to be revised and reduced to match that of the Marketing Officer. On April 15, 2009, the appellant received a letter from the Bihar Government directing to recover from him Rs. 63,765. It was stated in the letter: “With reference to the above-mentioned subject it is submitted that after receiving the enquiry report from the enquiry officer of the departmental enquiry done against you and the analysis of the department, it has been decided that a sum of Rs.63,765/- has been paid to you in excess due to mistake in fixation of pay which is recoverable from you. Kindly make it clear whether you will pay the said amount in one go or in instalments…”The appellant claims that he made several representations to the Bihar government protesting against the reduction of his pension and the proposed recovery. He stated that since the authorities did not respond, he filed a petition before Patna High Court, which order dated July 20, 2009 directed the government to consider his representation. On September 4, 2009, the appellant filed another representing stating that the February 8 resolution has been misinterpreted to deny the benefit because the same could not be interpreted as causing prejudice to him when he had been given a time-bound promotion much before December 31, 1995.On October 8, 2009, the Secretary, the Food and Consumer Protection Department, Government of Bihar, rejected the appellant's representation stating that the promotion given to the appellant would automatically come to an end after December 31, 1995.The appellant filed a civil writ before Patna High Court which was dismissed on February 23, 2010. Aggrieved, the filed a review petition, which was rejected on March 23, 2011. Against this, he filed two Letters Patent Appeals which were rejected by the division bench of...

Decision To Reduce Pay Scale Can't Be Applied Retrospectively: Supreme Court Quashes Recovery Steps Against Retired Govt Servant

Gursimran Kaur Bakshi

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Decision To Reduce Pay Scale Can't Be Applied Retrospectively: Supreme Court Quashes Recovery Steps Against Retired Govt Servant

Gursimran Kaur Bakshi

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INR 1099+GST

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