1. This judgment addresses
the case of Maruti Sharan Mishra, a retired Assistant Teacher, who challenged
the deduction of Rs. 7,08,718 from his gratuity. This deduction was made by the
education department of the State of Bihar due to an alleged overpayment during
his service. The Patna High Court deliberated on whether this recovery was
justified, considering principles of natural justice, equity, and the
circumstances surrounding the alleged excess payment.
Background of the Case
Maruti Sharan Mishra
served as an Assistant Teacher in Gaya district, Bihar, starting in 1991. Over
his career, he received a Selection Grade Scale in 2003 and was promoted to
Graduate Trained Teacher in 2012. Mishra retired on January 31, 2022, with a
pay scale of Rs. 72,100.
Following his retirement,
the Accountant General of Bihar fixed his pension at Rs. 33,000, which Mishra
contested as it was calculated after deducting three increments, effectively
reducing his last pay drawn to Rs. 66,000. While his gratuity was initially
sanctioned at Rs. 13,48,710, a sum of Rs. 7,08,718 was deducted under the
premise of incorrect pay fixation during his service.
Petitioner’s Arguments
Mishra sought the court’s
intervention to quash the order that led to the deduction from his gratuity and
to direct the respondents to refund the deducted amount. His primary arguments
were:
- Excess Payment Recovery: Recovering
the alleged excess payment from his gratuity post-retirement placed him in
a disadvantageous position. - Lack of Misrepresentation: He
was never found guilty of fraud or misrepresentation in the pay scale
fixation. - Violation of Natural Justice: The
deduction was made without prior notice or a hearing, violating natural
justice principles.
Respondent’s Arguments
The State of Bihar,
represented by the District Magistrate cum Collector, Gaya, defended the
recovery based on the following points:
- Erroneous Pay Fixation: The
excess payment resulted from an erroneous pay fixation during Mishra’s
promotion to Graduate Trained Scale. - Accountant General’s Directive: The
Accountant General, Bihar, had directed the District Programme Officer to
correct the pay fixation. - Undertaking by Petitioner: Mishra
had submitted a declaration with his pension papers stating that he would
return any excess amount paid to him. - Public Money: Recovery
was necessary because public money was involved, and the mistake was
detected later. The state relied on the Supreme Court’s judgment in High
Court of Punjab & Haryana vs Jagdev Singh to support their
claim that an undertaking given by an employee is binding.
Court’s Observations and
Judgment
The court examined the
arguments and relevant precedents, emphasizing the importance of natural
justice and equity in administrative actions.
The court noted that even
administrative orders that have civil consequences must adhere to natural
justice principles. “Civil consequences” were defined broadly,
affecting a citizen’s life.
The court found that the
respondent’s claim did not involve misrepresentation or fraud by the
petitioner. The excess payment, if any, resulted from an improper fixation by
the concerned respondents, and the petitioner could not be held responsible.
The court referred
to Syed Abdul Qadir Vs. The State of Bihar & Ors, which stated
that recovery of excess payments should be avoided if the employee did not
misrepresent facts and the excess payment was due to the employer’s error in
interpreting rules.
The court also
cited State of Punjab & Others Vs. Rafiq Masih (White Washer),
which outlined situations where recovery would be impermissible, including from
retired employees or those about to retire. The court emphasized the need to
balance the employer’s right to recover with the hardship caused to the
employee.
Conclusion
The Patna High Court
ruled in favor of the petitioner, Maruti Sharan Mishra. The court quashed the
order that led to the deduction from his gratuity and directed the respondents
to refund the deducted amount. The decision rested on the principles of natural
justice, equity, and the fact that the excess payment was not due to any fault
or misrepresentation by the employee.
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