Case Background
The petitioner joined Railway Protection Force as a Constable on 06.03.1978 after due selection. Over the years, he served at several places and received promotions in the normal course of his service.
He was promoted from Constable to Head Constable and transferred on 28.08.1995 from Carshed RPF, Sonarpur under Sealdah Division to Asansol Division of Eastern Railway. Later, he was promoted to Assistant Sub-Inspector on 08.01.2005 and posted to the Quarter Master Cell at the Headquarters in Hajipur with effect from the same date.
In 2014, he was transferred from RPF Post, Patna to C & T Company, Danapur on 20.04.2014. On 01.04.2017, he was again promoted, this time to the rank of Sub-Inspector. On 26.03.2018, he was posted to Security Control, RPF, Danapur. He finally superannuated from this post on 30.11.2018.
According to the petitioner, on the date of his retirement he was drawing a basic salary of Rs. 50,500/-. After his retirement, his pension papers and necessary documents were submitted to the authorities for fixation of pension and release of retiral benefits.
However, instead of fixing his pension on the last basic pay of Rs. 50,500/-, the authorities treated his basic pay as Rs. 49,000/-, which he had drawn 17 months earlier, on 01.07.2017. His basic pension was consequently fixed at Rs. 24,500/-. He also received leave encashment only for 266 days LAP (Leave Admissible Pay) and half leave encashment for 34 days, instead of full 300 days as claimed.
Further, by Office D.O. No. 307/2018 dated 28.11.2018, his basic pay as on 01.07.2018 was revised and refixed at Rs. 49,000/-. On that basis, a sum of Rs. 94,416/- was recovered from him as alleged overpayment.
Feeling aggrieved, the petitioner invoked the writ jurisdiction of the Patna High Court under Article 226 of the Constitution of India in CWJC No. 2850 of 2021. He challenged the reduction and refixation of his basic pay, the consequent reduction of pension, the recovery of Rs. 94,416/-, and the denial of full leave encashment for 300 days.
What the Court Examined and Decided
The central controversy before the Patna High Court was whether the Railways could, after the petitioner’s retirement, revise his pay retrospectively from 01.12.2003, reduce his last basic pay, fix his pension on that reduced pay, and recover the alleged excess amount of Rs. 94,416/- from his retiral dues.
The petitioner’s counsel argued that he had been drawing a basic salary of Rs. 50,500/- at the time of superannuation, and his pension ought to have been fixed on that last pay drawn. There had been no allegation of any fraud or misrepresentation by the petitioner during his entire service, nor had any show-cause notice or opportunity of hearing ever been given to him before reducing his pay or effecting recovery.
On the leave encashment issue, the petitioner asserted that he was entitled to leave encashment of 300 days, but was paid only for 266 days LAP and 34 days HLAP. During the hearing, however, his counsel informed the Court that this grievance had been redressed during the pendency of the writ petition.
On law, the petitioner relied heavily on the Supreme Court decision in State of Punjab and Others vs. Rafiq Masih (White Washer) and Others, (2015) 4 SCC 334. There, the Supreme Court had laid down specific situations where recovery of excess payment from employees would be impermissible in law, particularly when recovery is sought from retired employees, or when excess payments had continued for more than five years before the recovery order.
The petitioner also cited Thomas Danial vs. State of Kerala and Others, 2022 SCC OnLine SC 536, where the Supreme Court held that the State could not, after more than ten years, recover excess amounts paid on account of grant of extra increments.
To emphasise that reduction in pay and recovery from a government employee is a serious and punitive action requiring adherence to natural justice, the petitioner relied on Jagdish Prasad Singh vs. State of Bihar and Others, 2024 SCC OnLine SC 1909. In that case, the Supreme Court had set aside similar recovery and reduction in pension, directing restoration of the earlier pay scale and pension with applicable interest.
The petitioner further referred to two decisions of coordinate Benches of the Patna High Court: Akhilanand Upadhyay vs. The State of Bihar & Ors., 2010(4) PLJR 854 and Dashrath Singh vs. The Accountant General, Bihar & Ors., 2016(4) PLJR 497. These decisions held that reduction in pay scale or any adverse financial action cannot be taken without affording an opportunity of hearing and that pensionary benefits must be fixed on the basis of the last pay drawn, not on a revised lower pay scale fixed unilaterally.
Opposing the writ petition, counsel for the Union of India gave their version of the events. According to them, on 01.12.2003 the petitioner’s basic pay had been fixed at Rs. 4300/-, but he was wrongly given one extra increment on the same date, fixing his pay at Rs. 4400/-. This, they claimed, amounted to grant of double increments by mistake.
Because this erroneous pay fixation of 01.12.2003 was carried forward in subsequent years, the petitioner’s pay kept rising on a higher base than he was entitled to. When his retirement was approaching, his service record was sent to the Senior Divisional Finance Manager, East Central Railway, Danapur on 01.11.2018 for verification of his last pay.
During scrutiny, the finance authority noticed the double increment of 01.12.2003 and directed that the petitioner’s pay be reviewed and refixed from that date till his superannuation. They also indicated that the benefits under the 6th and 7th Central Pay Commissions would have to be recalculated, if his pay was to be corrected.
Following this, his basic pay as on 01.12.2003 was reviewed and reduced by one increment. His 6th Pay Commission and 7th Pay Commission fixations were reworked on that basis, and finally his basic pay as on 01.07.2018 was refixed at Rs. 49,000/-. On this revised pay, the authorities ordered recovery of Rs. 94,416/- as overpayment.
On leave encashment, they explained that as per updated leave records, the petitioner had 266 days LAP and 460 days HLAP at retirement. Out of this, 266 days LAP and 34 days HLAP were encashed, totalling 300 days, and he was paid Rs. 5,03,835/-.
The Union of India contended that the petitioner was aware he had been granted an extra increment in 2003 and yet did not seek rectification. They relied on Union of India & Others vs. Bhanwar Lal Mundan, (2013) 12 SCC 433, where the Supreme Court upheld the power of authorities to correct errors in pay fixation even after retirement and held that pension cannot be fixed on the basis of a wrongly inflated pay.
They also referred to Syed Abdul Qadir & Ors. vs. State of Bihar & Ors., (2009) 3 SCC 475, which permits recovery if the employee knew about the excess payment or if the mistake is corrected within a short time. Additionally, judgments of this Court in Kailash Bhushan Tiwari vs. The State of Bihar & Ors. (CWJC No. 7961 of 2020) and Uma Devi vs. The State of Bihar & Ors. (LPA No. 975 of 2019) were cited, where recoveries were allowed in facts suggesting knowledge or undertaking by the employee.
After hearing both sides and examining the record, the Patna High Court noted that there was no dispute that an extra increment had indeed been granted on 01.12.2003, and that this led to higher pay throughout the petitioner’s remaining service. However, the Court stressed certain key facts.
First, the extra increment was not granted because of any misrepresentation or fraud by the petitioner. Secondly, the record did not show that the petitioner had knowledge that the payments he was receiving were in excess or wrongly paid. Thirdly, the mistake had occurred in 2003 but was directed to be corrected only in 2018, i.e., after a lapse of about 15 years, and at the stage of retirement.
Referring to Syed Abdul Qadir, the Court cited the principle that recovery of excess payment is generally barred when there is no fraud or misrepresentation by the employee and when the excess payment has continued for a long duration. The Court also quoted the important guidelines laid down in Rafiq Masih, in particular that recovery from retired employees, or where excess payment has continued for more than five years before the recovery order, is impermissible in law.
Applying these principles, the Court held that ordering recovery from the petitioner, who had already retired and had received the excess benefit for 15 years, would be iniquitous, arbitrary and harsh. Such recovery was therefore held to be impermissible.
The Court then considered whether the petitioner’s pension could be refixed at this stage on the basis of a corrected lower pay. It acknowledged that employers do have the power to rectify mistakes in pension fixation after retirement, but such power must be exercised following the procedure prescribed by law and in adherence to the principles of natural justice.
In this case, no show-cause notice had been issued to the petitioner at any stage before reducing his pay and recovering money. Relying on the coordinate Bench decisions in Akhilanand Upadhyay and Dashrath Singh, the Court reiterated that no order adversely affecting a person’s pay or pension can be passed without hearing him; any such action would be void ab initio.
The Court further drew strength from the Supreme Court’s recent judgment in Jagdish Prasad Singh. There, the Court had characterised reduction of pay scale and recovery from a government employee as a punitive action with serious civil consequences, which cannot be taken many years after retirement without following natural justice. In that case, the Supreme Court had set aside reduction of pension and recovery and directed continuation of pension in the earlier pay scale.
In contrast, the cases cited by the Union of India, such as Bhanwar Lal Mundan, Kailash Bhushan Tiwari and Uma Devi, involved different factual circumstances where the employees either had knowledge of excess payment, had given undertakings, or had failed to disclose obvious excess amounts. Those precedents, therefore, did not assist the respondents in the present case.
On this reasoning, the Court concluded that the order revising the petitioner’s pay scale and directing recovery of Rs. 94,416/-, as contained in Annexure-4 to the writ petition, could not stand.
The Court accordingly quashed the impugned order. It directed the authorities to restore the pay which the petitioner was drawing at the time of his retirement and to refund the recovered amount of Rs. 94,416/- preferably within eight weeks from the date of receipt or production of a copy of the judgment.
As regards the claim concerning leave encashment for 300 days, the Court noted the statement of the petitioner’s counsel that this grievance had already been redressed during the pendency of the writ petition, and therefore did not examine that issue further.
In conclusion, the writ petition was allowed to the extent indicated, i.e., quashing the pay revision and recovery and ordering restoration of pay and refund of the recovered sum.
Why This Judgment Matters
This judgment is important for retired and soon-to-retire government staff, especially lower and middle level employees, who often face sudden reductions in pension or recovery notices on the eve of retirement.
The Patna High Court has made it clear that when excess salary has been paid for many years without any fault of the employee, and without any fraud or misrepresentation from their side, the employer cannot suddenly recover those amounts at the time of retirement.
The Court has also underlined that cutting down someone’s pay or pension and recovering money from their retiral benefits is not a small administrative correction. It is a serious and harsh step with major financial consequences, and therefore the employee must be given prior notice and a fair chance to be heard.
For many retired persons who depend entirely on pension and retiral benefits, this judgment offers protection against delayed, unilateral corrections by departments. It reinforces earlier Supreme Court rulings like Rafiq Masih, Syed Abdul Qadir, Thomas Daniel and Jagdish Prasad Singh, and brings those protections into clear effect in the context of the Railways and other government services.
Legal Issues and Answers
- Issue: Can the Railways, after 15 years, revise an employee’s pay retrospectively, reduce his last drawn pay, and recover alleged excess payment from his retiral dues, when there is no fraud or misrepresentation on his part and no prior notice was given?
Answer: No. The Patna High Court held that such recovery and reduction of pay are iniquitous, arbitrary and harsh, hit by the principles laid down in Rafiq Masih, Syed Abdul Qadir and other judgments, and also violative of natural justice as no opportunity of hearing was given. The impugned order was quashed, with directions to restore the last pay and refund the recovered amount. - Issue: Can the employer refix pension after retirement on a lower admissible pay without issuing any show-cause notice or hearing the employee?
Answer: No. While the employer may correct mistakes in pension fixation, any adverse action altering pay or pension must follow the law and natural justice. In absence of notice or hearing, such action is void and unsustainable. - Issue: Was the petitioner’s claim regarding leave encashment for 300 days required to be adjudicated?
Answer: No. The Court recorded the petitioner’s statement that his grievance on leave encashment had already been redressed during the pendency of the writ petition, and therefore did not decide the issue.
Cases Cited by the Court
- Syed Abdul Qadir & Ors. vs. State of Bihar & Ors., (2009) 3 SCC 475
- State of Punjab & Ors. vs. Rafiq Masih (White Washer) & Ors., (2015) 4 SCC 334
- Thomas Daniel vs. State of Kerala & Ors., 2022 SCC OnLine SC 536
- Jagdish Prasad Singh vs. State of Bihar & Ors., 2024 SCC OnLine SC 1909
- ITC Limited vs. State of U.P. & Ors., 2011 (7) SCC 493 (referred within Jagdish Prasad Singh)
- Union of India & Ors. vs. Bhanwar Lal Mundan, (2013) 12 SCC 433
- Punjab National Bank vs. Manjeet Singh, (2006) 8 SCC 647
- Bihar SEB vs. Bijay Bhadur, (2000) 10 SCC 99
- Sahib Ram vs. State of Haryana, 1995 Supp (1) SCC 18
- Shyam Babu Verma vs. Union of India, (1994) 2 SCC 521
- Union of India vs. M. Bhaskar, (1996) 4 SCC 416
- V. Gangaram vs. Director, (1997) 6 SCC 139
- Col. B.J. Akkara (Retd.) vs. Government of India, (2006) 11 SCC 709
- Purshottam Lal Das vs. State of Bihar, (2006) 11 SCC 492
- Akhilanand Upadhyay vs. The State of Bihar & Ors., 2010(4) PLJR 854
- Dashrath Singh vs. The Accountant General, Bihar & Ors., 2016(4) PLJR 497
- Kailash Bhushan Tiwari vs. The State of Bihar & Ors., CWJC No. 7961 of 2020 (Patna High Court)
- Uma Devi vs. The State of Bihar & Ors., L.P.A. No. 975 of 2019 (Patna High Court)
Case Details
Case Number: Civil Writ Jurisdiction Case No. 2850 of 2021
Case Title: Ram Lakhan Singh vs. The Union of India & Ors.
Citation: 2024(4) PLJR 369
Court: High Court of Judicature at Patna
Coram: Hon’ble Mr. Justice Harish Kumar
Date of Judgment: 23.09.2024
Advocates for the Petitioner: Mr. Ramchandra Singh, Mr. Jitendra Kumar Singh, Mr. Shankar Kumar, Mr. Surajbans Rai, Advocates
Advocates for the Respondents (Union of India and Railway Authorities): Mr. Maurya Vijay Chandra, Sr. CGC; Dr. Priya Gupta, CGC
Nature of the Case: Writ petition under Article 226 of the Constitution of India challenging post-retirement reduction in pay, refixation of pension and recovery of alleged excess payment, with a related claim on leave encashment.
Link to the Judgment: Click here to read the full judgment of the Patna High Court
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