Case Background
The petitioner worked under the Water Resources Department, Government of Bihar. He was first appointed as a Junior Engineer and later promoted as Assistant Engineer (Civil) in the Irrigation Division, Birpur, Supaul. He ultimately superannuated from service on 31.01.2021 from the post of Assistant Engineer, Irrigation Division, Birpur, Supaul.
During his service, the department granted him the benefit of the 2nd Modified Assured Career Progression (MACP) Scheme with effect from 01.01.2009. This was done by Memo No. 4426 dated 08.09.2014 issued by the Water Resources Department. Under this order, he and many similarly situated employees in the same pay scale were fixed in Pay Band-III (Rs. 15,600–39,100) with Grade Pay Rs. 6600.
Later, by departmental notification contained in Memo No. 874 dated 15.09.2016, he was promoted to the post of Assistant Engineer (Civil). While he continued to draw pay as per the earlier MACP benefit, the department, relying on a subsequent Finance Department resolution, issued Memo No. 4447 dated 06.12.2017 revising the grade pay under 2nd MACP from PB-3 + 6600 to PB-3 + 5400.
This downward revision of grade pay affected several employees, including the petitioner. Some similarly placed persons challenged Memo No. 4447 dated 06.12.2017 and related recovery directions before the Patna High Court in different writ petitions, including CWJC No. 411 of 2018, CWJC No. 8146 of 2020, and CWJC No. 20160 of 2021.
In CWJC No. 411 of 2018, the Court initially stayed recovery by order dated 12.01.2018. In CWJC No. 8146 of 2020 and connected matters, the Court treated the impugned communications as show-cause notices and directed the authorities to provide an opportunity of hearing and then pass speaking orders. In CWJC No. 20160 of 2021, a co-ordinate Bench set aside Memo No. 4447 dated 06.12.2017 and related recovery orders, and directed that any amount already recovered be refunded.
Meanwhile, when the petitioner retired on 31.01.2021, his pension papers, original service book, pay slip and salary assessment sheets were forwarded by the Executive Engineer, Irrigation Division, Birpur, Supaul to the Superintending Engineer. A no dues certificate was issued and admissible amounts were paid, except leave encashment, gratuity and 10% of pension, which were withheld due to a pending departmental proceeding under Rule 43(C) and (D) of the Bihar Pension Rules, 1950.
What the Court Examined and Decided
The writ petition, Civil Writ Jurisdiction Case No. 20219 of 2021, was filed by the retired Assistant Engineer before the Patna High Court seeking directions for release of all his retiral benefits. He asked for payment of gratuity, unutilized earned leave and arrears of pension with interest, on the basis of the last pay slip issued by the Finance (PCFC) Department dated 18.01.2021. He also sought a direction not to recover any amount already paid to him under the 2nd MACP with Grade Pay PB-3 + 6600 with effect from 01.01.2009.
During pendency of the writ petition, the State authorities decided to recover an alleged excess amount of Rs. 7,41,799 from him. This amount was claimed to be the difference between Grade Pay Rs. 6600 and Grade Pay Rs. 5400 for the period from 01.01.2009 onwards. The authorities issued:
- Letter No. 915 dated 18.08.2021, informing him of the excess payment and proposed recovery,
- Letter No. 411 dated 16.03.2022, requesting the Finance (PCFC) Department to issue authority slip after adjusting Rs. 7,41,799 from his dues, and
- Letter No. 610 dated 17.05.2022, under which Rs. 7,41,799 was actually recovered out of Rs. 11,69,920 of leave encashment, leaving only Rs. 4,28,121 to be paid to him.
The petitioner filed I.A. No. 01 of 2024 to challenge these three letters and sought quashing of the recovery orders.
In the counter affidavit, the State respondents (Water Resources and other related departments) admitted that the petitioner had been granted 2nd MACP with Grade Pay Rs. 6600 by Memo No. 4426 dated 08.09.2014, with a specific Clause 2 which said that if any defect was found in future, the order could be cancelled or modified and any excess payment could be recovered.
They stated that thereafter, based on the Finance Department’s Resolution No. 3655 dated 10.04.2015 and opinion, the Water Resources Department amended the earlier MACP order and reduced the grade pay to Rs. 5400 through Memo No. 4447 dated 06.12.2017. On that basis, the Finance (PCFC) Department issued a fresh pay slip on 21.10.2020, fixing the petitioner’s pay with Grade Pay Rs. 5400 from 01.01.2009. The resulting excess payment was calculated at Rs. 7,41,799 and recovery orders were passed accordingly.
The petitioner’s counsel argued that the recovery after retirement from his leave encashment was illegal, arbitrary and against the law laid down by the Supreme Court in State of Punjab and others v. Rafiq Masih (White Washer) and others, (2015) 4 SCC 334. He pointed out that:
- The alleged excess payment had been made for more than 12 years before the recovery decision,
- The petitioner had not committed any fraud or misrepresentation, and
- There was no personal undertaking from him to refund any excess amount.
Reliance was also placed on a co-ordinate Bench judgment in Bikrama Singh and another v. State of Bihar and others (CWJC No. 3455 of 2012), where recovery from retiral benefits had been quashed based on the principles in Rafiq Masih.
On the other hand, the State’s counsel submitted that the petitioner, being a Class II officer, did not fall in the protected category of Class III/IV employees. Therefore, according to the State, there was no absolute bar on recovering excess payment from his post-retiral benefits. The State further relied on High Court of Punjab and Haryana and others v. Jagdev Singh, (2016) 14 SCC 267, where the Supreme Court held that an officer who was put on notice that excess payment may be recovered was bound to refund such excess.
The Patna High Court, however, focused on a different and more fundamental aspect. It noted that the entire recovery against the petitioner had been made on the basis of Memo No. 4447 dated 06.12.2017, by which the grade pay under 2nd MACP was reduced from Rs. 6600 to Rs. 5400. This very memo had already been set aside by a co-ordinate Bench in CWJC No. 20160 of 2021, decided on 05.01.2022, following earlier orders in CWJC No. 8146 of 2020 and connected matters.
In CWJC No. 20160 of 2021, the Court had quashed Memo No. 4447 dated 06.12.2017 and related recovery orders, and directed that if any recovery had been made from those petitioners, such amounts be refunded to them in accordance with law. That order remained in force. Though the State had filed LPA No. 172 of 2022 against that judgment and an interlocutory application for stay, there was no indication before this Court that the judgment in CWJC No. 20160 of 2021 had been stayed or reversed.
In a supplementary counter affidavit in the present case, the respondents themselves admitted the fact that Memo No. 4447 had been set aside and also disclosed that LPA No. 172 of 2022 was pending. They further stated that the petitioner’s grievance would be considered after disposal of the LPA.
Justice Harish Kumar observed that once the primary order (Memo No. 4447 dated 06.12.2017) forming the basis of recovery was no longer in existence due to its quashing in CWJC No. 20160 of 2021, no recovery order could be lawfully sustained on that foundation. Passing recovery orders in spite of that judgment was described by the Court as not only being in the teeth of the earlier order but also an attempt to overreach it, and thus contemptuous in nature.
On this basis, the Court held that the impugned recovery orders — Letter No. 915 dated 18.08.2021, Letter No. 411 dated 16.03.2022 and Letter No. 610 dated 17.05.2022 — were unsustainable in law as well as on facts and they were accordingly quashed.
Consequentially, the Court directed the respondent authorities to ensure payment of the deducted amount of leave encashment to the petitioner forthwith. As to his entitlement to 2nd MACP benefit with Grade Pay PB-3 + 6600 from 01.01.2009, the Court clarified that this question would be governed by the final outcome of LPA No. 172 of 2022.
The Court also clearly stated that it was making no observation on the merits of:
- The petitioner’s entitlement to 2nd MACP with Grade Pay Rs. 6600, or
- The pending departmental proceeding under Rule 43(C) and (D) of the Bihar Pension Rules, 1950, on account of which 10% of pension and full gratuity had been withheld.
Accordingly, the writ petition was allowed to the extent of quashing the recovery orders and directing refund of the deducted leave encashment.
Why This Judgment Matters
This judgment is especially important for government employees in Bihar, particularly those nearing retirement in technical or engineering cadres. It shows that departments cannot blindly continue to make recoveries based on an order that has already been set aside by the High Court in a similar matter.
It reinforces a basic rule of fairness: once a particular policy or order, like Memo No. 4447 dated 06.12.2017, has been quashed, authorities must first respect that decision before taking any further action. Continuing to act as if such an order still exists can expose the department to judicial criticism and even contempt.
The judgment also provides relief to the petitioner and similarly placed employees by ensuring that their leave encashment cannot be reduced through such unsustainable recoveries. At the same time, it carefully keeps open the question of the correct grade pay under 2nd MACP, linking that to the final decision in LPA No. 172 of 2022, and does not interfere with ongoing departmental proceedings or other withheld benefits.
Legal Issues and Answers
- Issue: Can the State recover an alleged excess amount of Rs. 7,41,799 from a retired Assistant Engineer’s leave encashment on the basis of Memo No. 4447 dated 06.12.2017, when that memo has already been quashed by the Patna High Court in a similar case?
Answer: No. The Patna High Court held that once Memo No. 4447 dated 06.12.2017 has been set aside in CWJC No. 20160 of 2021, any recovery order based on that memo is unsustainable and must be quashed. - Issue: What directions were issued regarding the amount already deducted from the petitioner’s leave encashment?
Answer: The Court directed the authorities to ensure payment of the deducted portion of leave encashment to the petitioner forthwith. - Issue: Did the Court finally decide the petitioner’s right to 2nd MACP with Grade Pay PB-3 + 6600 and the pending departmental proceedings affecting gratuity and pension?
Answer: No. The Court stated that the question of entitlement to 2nd MACP with Grade Pay PB-3 + 6600 will depend on the final outcome of LPA No. 172 of 2022, and it expressly refrained from making any observation on the merits of MACP entitlement or the departmental proceeding under Rule 43(C) and (D) of the Bihar Pension Rules, 1950.
Cases Cited by the Court
- State of Punjab and others v. Rafiq Masih (White Washer) and others, (2015) 4 SCC 334.
- Shyam Babu Verma and others v. Union of India and others, (1994) 2 SCC 521.
- Sahib Ram v. State of Haryana and others, 1995 Supp (1) SCC 18.
- Chandi Prasad Uniyal and others v. State of Uttarakhand and others, (2012) 8 SCC 417.
- High Court of Punjab and Haryana and others v. Jagdev Singh, (2016) 14 SCC 267.
- Bikrama Singh and another v. State of Bihar and others, CWJC No. 3455 of 2012 (Patna High Court).
- CWJC No. 8146 of 2020 and connected matters, Patna High Court (regarding treatment of communication as show-cause and requirement of speaking order).
- CWJC No. 20160 of 2021, Patna High Court (setting aside Memo No. 4447 dated 06.12.2017 and related recovery orders).
Case Details
Case Number: Civil Writ Jurisdiction Case No. 20219 of 2021
Case Title: Arvind Kumar v. The State of Bihar and others
Coram: Hon’ble Mr. Justice Harish Kumar
Citation: 2025(3) PLJR 8
Advocates:
- For the Petitioner: Mr. Rajesh Kumar, Advocate; Mr. Lalit Narayan Jha, Advocate
- For the Respondents: Mr. Sudhanshu Bhushan, AC to GP-7
Nature of the Case: Writ petition (civil) under Article 226 of the Constitution, challenging recovery from retiral benefits and seeking release of pensionary dues.
Date of Judgment: 13.11.2024
Court: High Court of Judicature at Patna
Link to judgement ; https://patnahighcourt.gov.in/viewjudgment/MTUjMjAyMTkjMjAyMSMxI04=-oDt42kFpPG0=
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