The Patna High Court, in an oral judgment dated 13 January 2021, protected a retired Class III employee from recovery of alleged “excess payment” and directed the Water Resources Department to release the full gratuity with statutory interest. The Court emphasized that once the State’s 14.09.2015 withdrawal circular had already been quashed in earlier litigation, there was no surviving basis to deduct amounts from the employee’s retirement dues. The matter was heard and decided by Hon’ble Mr. Justice Rajeev Ranjan Prasad in CWJC No. 12040 of 2019.
Simplified Explanation of the Judgment
A government clerk (the petitioner) served in the Works/Water Resources set-up and retired on 31.03.2019. During his service, the Finance Department had issued a series of circulars to rationalize pay for clerical cadres across Works Departments. Two circulars are crucial: first, Memo No. 3111 dated 25.03.2015, which restructured the Accounts Clerk cadre, and second, Memo No. 6338 dated 16.07.2015, which treated Store Keepers (Bhandarpal) and Correspondence Clerks at par with Accounts Clerks for pay and benefits. Benefits under these circulars were extended to the petitioner. Later, however, the Finance Department issued Memo No. 8059 dated 14.09.2015, withdrawing the 16.07.2015 benefits prospectively and directing recovery where payments had already been made. This led to departmental action to recoup amounts from the petitioner’s gratuity.
The petitioner approached the High Court seeking (i) full gratuity without recovery and (ii) quashing of the departmental recovery letter dated 11.04.2019. In an interlocutory application, he also challenged the Finance Department’s 14.09.2015 circular. He argued that (a) he was lawfully granted parity with Accounts Clerks under the 16.07.2015 circular; (b) the later withdrawal circular of 14.09.2015 had already been set aside by a coordinate Bench of the Patna High Court on 27.02.2019 in a batch of similar cases; and (c) any recovery from a retired Class III employee is legally impermissible in light of the Supreme Court’s ruling in State of Punjab v. Rafiq Masih (White Washer) (2015).
The State resisted the petition by arguing that the petitioner’s appointment dated 20.03.1980 fell outside the operative dates mentioned in paragraph 5 of the 25.03.2015 circular (which covered 01.05.1980 to 27.09.1999 for certain benefits) and, therefore, he was not entitled to parity. The State also cited the Supreme Court’s judgment in High Court of Punjab & Haryana v. Jagdev Singh (2016) to contend that recovery is permissible when benefits are drawn subject to an undertaking to refund if found in excess.
The High Court rejected the State’s position. It recorded that: (1) the 14.09.2015 withdrawal circular—on which the recovery attempt was based—had already been quashed by a coordinate Bench on 27.02.2019; (2) the petitioner had received benefits pursuant to the 16.07.2015 circular and there was no allegation of misrepresentation or fraud; and (3) there was no evidence that the petitioner had given any prior undertaking to refund, which was central to the Supreme Court’s reasoning in Jagdev Singh. In contrast, the case clearly fell within the protective categories enumerated in Rafiq Masih, which bar recovery from Class III retirees and where payments were made by the employer’s own actions without employee fault.
The Court also noted that, following the recommendations accepted in the Seventh Pay Revision (2017), the cadres of Accounts Clerk, Bhandarpal, Correspondence Clerk, and even Lower and Upper Division Clerks in Works Departments had effectively been merged into a general clerical cadre. This policy shift further undermined the rationale for singling out the petitioner for recovery. In view of these factors, the Court set aside the recovery letter dated 11.04.2019 and directed the State to pay the entire gratuity with statutory interest (from 30 days after the gratuity became due until payment), without any deduction on the ground of “excess” under the 16.07.2015 circular.
Significance or Implication of the Judgment
This decision is significant for clerical staff and similarly placed retirees in Bihar’s Works/Water Resources Departments. It clarifies that: (a) once a policy withdrawal has been quashed by the Court, the State cannot rely on it to effect deductions from retirement benefits; (b) recovery from a retired Class III employee is ordinarily impermissible when payments were made by the department’s own actions, absent misrepresentation; and (c) subsequent pay rationalization and cadre-merger under the Seventh Pay Revision weighs against recovery attempts that are based on outdated, quashed, or superseded instructions. Practically, this judgment reinforces the security of retirement dues—particularly gratuity—by preventing retrospective financial hardship after decades of service.
Legal Issue(s) Decided and the Court’s Decision with reasoning
- Whether the department could recover alleged “excess payment” from the petitioner’s gratuity based on a withdrawn circular of 14.09.2015.
• Decision: No. The 14.09.2015 circular had been quashed by a coordinate Bench on 27.02.2019; therefore, it could not be used to justify recovery. - Whether the petitioner’s case was distinguishable because of his date of appointment (20.03.1980) vis-à-vis the date bands in paragraph 5 of the 25.03.2015 circular.
• Decision: The State’s argument failed. The Court found this line of distinction to be misplaced in light of the prior judgment quashing the withdrawal circular, the extension of benefits already made, and the later cadre rationalization. - Whether recovery is permissible without any employee undertaking to refund.
• Decision: No. In the absence of a prior undertaking, the State could not invoke Jagdev Singh. The petitioner’s circumstances were governed by Rafiq Masih, which protects Class III retirees from such recovery. - Relief:
• The recovery letter dated 11.04.2019 was quashed.
• The State was directed to pay the entire gratuity with statutory interest from 30 days after it fell due until payment, without deduction.
Judgments Referred by Parties (with citations)
- High Court of Punjab & Haryana v. Jagdev Singh, (2016) 14 SCC 267 (relied on by the State to justify recovery in cases involving prior refund undertakings).
Judgments Relied Upon or Cited by Court (with citations)
- State of Punjab & Others v. Rafiq Masih (White Washer), 2015 AIR SCW 501 — recovery from Class III/IV retirees generally impermissible when excess payment is not due to employee fault.
- Patna High Court, CWJC No. 9633 of 2016 and analogous matters, judgment dated 27.02.2019 — quashed the 14.09.2015 Finance Department letter and extended parity benefits; petitioners entitled to same benefits as in LPA No. 124 of 2018.
- Patna High Court, LPA No. 124 of 2018 (Vinit/Binit Kumar decision), judgment dated 11.07.2018 — Division Bench decision referenced for parity benefits to similarly placed clerical staff.
Case Title
Petitioner (Correspondence Clerk/Retired) v. State of Bihar & Others (Water Resources Department)
Case Number
Civil Writ Jurisdiction Case No. 12040 of 2019 (Patna High Court)
Citation(s)
2021(2) PLJR 157
Coram and Names of Judges
Hon’ble Mr. Justice Rajeev Ranjan Prasad.
Names of Advocates and who they appeared for
- For the petitioner: Dr. Harendra Nath Ojha, Advocate; Mr. Jitendra Kumar, Advocate.
- For the State/Respondents: Mr. Harish Kumar, Government Pleader 8 (GP-8).
Link to Judgment
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