V BHASKAR vs M/O DEFENCE on 14 October 2026

O R D E R

PER: JUSTICE S. SUJATHA, MEMBER (J)

Accepting the cause shown, delay in filing the OA is condoned. Accordingly, MA No. 16/2026 for condonation of delay is allowed.

2. This application is filed by the applicant under Section 19 of the Administrative Tribunals Act, 1985 seeking the following reliefs: “(i) To hold and declare that the recovery of Rs. 1,75,460/- made from the retirement benefits due to the applicant in terms of the LPC cum data sheet dated 30.12.2019, Annexure A3, on the ground that it was paid in excess, is not sustainable in law.

(ii) Consequently, direct the respondents to refund Rs. 1,75,460/- to the applicant with interest at 12% p.a. payable from 30.12.2019 till the date of actual payment and

(iii) Grant such other relief deemed fit, having regard to the facts and circumstances of the case.”

3. Facts in brief are that the applicant who was working as Junior Scientific Officer in Aviation Electronics Inspection Specification Documentation Authority (ALISDA), Directorate General of Aeronautical Quality Assurance (DGAQA) attained the age of superannuation on 31.03.2020. The applicant’s pension papers were forwarded to the office of the Controller of Defence Accounts vide letter dated 11.11.2019 for settlement. The applicant submitted a representation to the Respondent No. 2 through the Respondent No. 3 stating that while scrutinising his pension papers it was observed that his pay was fixed during the period 2009 and thereafter the pay was re-fixed as per the letter dated 17.02.2017 of the DGAQA, New Delhi considering minimum upgraded pay scale of Rs. 7450-11500/-. As such, re-fixation of pay has been done with effect from 01.01.2006 to 31.12.2019 leading to recovery of Rs. 1,75,460/- from the applicant. Accordingly, the applicant submitted the request to waive the recovery of Rs. 1,75,460/- as it was not due to his fault. The Respondent No. 3 recommending for waiver of recovery amount of Rs. 1,75,460/- requested to consider the same as it was not due to applicant's fault. However, the amount in question was deducted from the terminal benefits payable to the applicant. Again, the applicant submitted a detailed representation on 08.02.2022 to Respondent No. 1 requesting a waiver of the recovery of Rs. 1,75,460/-. Despite the same, the same has been recovered from the Earned Leave encashment payable to him. Subsequently, the applicant submitted another representation to Respondent No.1 on 02.01.2024 but to no avail. Hence, this OA.

4. Learned counsel Shri A.R. Holla representing the applicant submits that the recovery of Rs. 1,75,460/- made from the terminal benefits due to him, on the ground that it is excess payment is contrary to the decision of the Hon’ble Supreme Court in State of Punjab & Ors vs. Rafiq Masih (White Washer) and Ors., reported in (2015) 4 SCC 334. The alleged excess payment was done and scrutiny of pay fixation of the applicant carried on for the period from 01.01.2006 till 31.12.2019 by the auditors. The applicant was not at all involved. Thus, the action of the respondents is unjustified.

5. Learned counsel Shri Vishnu Bhat representing the respondents submitted that the applicant was appointed as Chargeman in the department DGAQA under Department of Defence Production (DDP) on 05.10.1990. He was promoted to Assistant Foreman with effect from 01.08.2003 in the pre-revised pay scale of Rs. 6500-10500/-. The post of Assistant Foreman was upgraded and merged with the post of Foreman in the pre-revised pay scale of Rs. 7450-11500/-. Accordingly, the applicant’s pay was fixed in the revised pay scale of Rs. 9300-34800/- with Grade Pay of Rs. 4600/- in the Pay Band 2 with effect from 01.01.2006 fixing the pay at Rs. 13,580/- plus Grade Pay of Rs. 4600/-. The applicant thereafter had submitted an application dated 24.03.2016 stating that the said fixation done from 01.01.2006 has a discrepancy and requested to fix the pay at Rs. 13,860/- + Grade Pay Rs. 4600/- with effect from 01.01.2006. The said application was forwarded to HQ, DGAQA vide letter dated 31.03.2016 who in turn advised to examine the pay fixation in terms of guidelines issued by Ministry of Finance OM dated 13.11.2009 and further advised to take up the case for re-fixation with concerned CDA, if required. Re-fixation at Rs. 13,860/- plus Grade Pay Rs. 4600/- was done by Respondent No. 3 with the approval of the CDA and published DO Part Sl. No. 22/OFFICERS/2017 dated 17.05.2017 with effect from 01.01.2006. Arrears on account of pay re-fixation (for the period 01.01.2006 to June 2017) was made during July, 2017 and continued to pay till December 2019. As the applicant was due for retirement on 31.03.2020, during the final audit/scrutiny of his pension papers, it was discovered that re- fixation at Rs. 13,860/- plus Grade Pay Rs. 4600/- was wrong and the earlier fixation of pay at Rs. 13,580/- plus Grade Pay Rs. 4600/- is correct. Accordingly, Respondent No. 3 has obtained fresh fixation approval from CDA (R&D) from Bangalore and an undertaking from the applicant that any excess payment detected in the light of discrepancies noticed subsequently will be refunded to the Government against future payments. Further, CDA has directed PCDA (Pension) to recover the amount of Rs. 1,75,460/- from DCRG to which the applicant submitted a representation dated 08.01.2020 requesting waiver of the excess amount. However, no excess amount paid was recovered from the DCRG account of the applicant but the same was recovered from EL encashment with due approval of CDA.

6. Learned counsel submitted that based on the applicant's request dated 24.03.2016, the request for re-fixation of pay with effect from 01.01.2006 was taken up. During the scrutiny of his pension papers it was noticed that the fixation made initially at Rs. 13,580/- was correct and re-fixation made at Rs. 13,860/- was wrong. The said revised re-fixation led to a recovery of Rs.

1,75,460/- being excess amount paid, hence, the judgment of Rafiq Masih, supra, is not applicable to the case on hand and the applicant neither belongs to Group ‘C’ or ‘D’ category. Excess payment was made for less than five years, precisely 2 years and 6 months (17.07.2017 to 26.12.2019). Accordingly, seeks for dismissal of the OA.

7. We have carefully considered the submissions of the learned counsel for the parties and perused the material on record.

8. Merely for the reason that the applicant submitted the representation requesting for revision of pay fixation from 01.01.2006, the case cannot be considered as a misrepresentation made by the applicant. As admitted by the respondents in their reply statement, on forwarding the said application to HQ, DGAQA vide letter dated 31.03.2016 who in turn vide letter dated 17.02.2017 advised to examine the pay fixation in terms of the guidelines issued by Ministry of Finance OM No. 1/1/2008-IC dated 13.11.2009 and further advised to take up the case for re- fixation directly with the concerned CDA, if required. Re-fixation at Rs. 13,860/- plus Grade Pay Rs. 4600/- was done by Respondent No. 3 with the approval of the CDA and published. The officers had the responsibility to examine the request of the applicant for revision of his pay whether is in conformity with the extant rules or not. After doing that exercise only, the applicant's pay fixation has been revised. Even after such examination made by the authorities, if it is found that the applicant's claim calls for necessary action of revising the pay fixation, how the applicant could be blamed for the same if certain interpretations are given with the bonafide intention in fixing the pay after the 6th CPC coming into force with effect from 01.01.2006, hence, no fault can be attributed to the applicant when the final decision has to be taken by the respondent authorities based on the claim of the applicant. Leave encashment is a legitimate and recognised component of retiral benefits.

8A. Leave encashment is earned by an employee in lieu of service rendered. It is a right and not a charitable gift from the employer. The stance of the department that the excess amount of Rs. 1,75,460/- was recovered from leave encashment and not from DCRG is wholly untenable. In terms of Rafiq Masih, supra, recovery of excess amount paid at the verge of retirement of an employee from his retiral benefits is wholly unjustifiable. Rafiq Masih, supra, does not confine to only two conditions, where the

recovery cannot be made viz., (i) from Group ‘C’ or Group ‘D’ employees, (ii) excess payment made for a period in excess of five years. There are other conditions. One such condition is no recovery is permissible from the retiral benefits of the applicant at the time of his retirement. It is beneficial to extract para no. 18 of Rafiq Masih, supra, which reads as under: “18. It is not possible to postulate all situations of hardship, which would govern employees on the issue of recovery, where payments have mistakenly been made by the employer, in excess of their entitlement. Be that as it may, based on the decisions referred to hereinabove, we may, as a ready reference, summarise the following few situations, wherein recoveries by the employers, would be impermissible in law:

(i) Recovery from employees belonging to Class-III and Class-IV service (or Group ‘C’ and Group ‘D’ service).

(ii) Recovery from the retired employees, or the employees who are due to retire within one year, of the order of recovery.

(iii) Recovery from employees, when the excess payment has been made for a period in excess of five years, before the order of recovery is issued.

(iv) Recovery in cases where an employee has wrongfully been required to discharge duties of a higher post, and has been paid accordingly, even though he should have rightfully been required to work against an inferior post.

(v) In any other case, where the Court arrives at the conclusion, that recovery if made from the employee, would be iniquitous or harsh or arbitrary to such an extent, as would far outweigh the equitable balance of the employer’s right to recover.”

9. Indisputedly, excess payment has been recovered from the retiral benefits of the applicant. In such circumstances, it is not uncommon that any delayed action of recovery of the excess amount paid will cause undue hardship to the applicant. Paras 18

(ii) and (v) certainly attracts. Such recovery is iniquitous, harsh and arbitrary to such an extent that it will far outweigh the equitable balance of the employer's right to recover the same. The respondent authorities have failed to consider the waiver request of the applicant in the background of this case.

10. It is apt to refer to the judgment of the Hon’ble Bombay High Court in the case of Subhash Nimba Chavan vs the State of Maharashtra in Writ Petition No. 6440/2024 and connected matters (DD: 01.07.2024) wherein, it is held that the undertaking extracted at the stroke of retirement, is taking advantage of helplessness of such petitioners who were at the verge of the retirement, where at the time of calculating their retiral benefits, an undertaking is extracted. Thus, it is settled law that at the time of superannuation of an employee, asking him to tender an undertaking, practically amounts to an afterthought on the part of the employer and a mode of compelling the employee to execute an undertaking since they are apprehensive that their retiral benefits would not be released until such undertaking is executed. Such an undertaking will not have same sanctity of an undertaking executed when the payment of revised pay scale had commenced. Taking into account that the applicant was not involved in any mischief, fraud or deceit in orchestrating his wrongful pay revision, law laid down in Rafiq Masih, supra, would apply. Undertaking taken in the coercive circumstances at the stroke of retirement from the employee would not exonerate the employer from his liability to refund if the case falls under the four corners of Rafiq Masih, supra. This Tribunal has to lift the corporate veil to find out the real truth in giving the undertaking at the verge of retirement of an employee. Blindly, no support could be given to such an undertaking given at the verge of retirement to enable him to get the retiral benefits at the earliest. As such, no excess amount paid could be recovered from the employee from his retiral benefits.

11. For the reasons aforesaid, we pass the following:

:ORDER:

Respondents are directed to refund Rs. 1,75,460/- (Rupees One Lakh Seventy Five Thousand Four Hundred and Sixty Only) to the applicant in an expedite manner within a period of eight weeks from the date of receipt of certified copy of this order.

OA stands allowed to the extent indicated above.

No order as to costs.

Sd/- Sd/- (DR. SANJIV KUMAR) (JUSTICE S. SUJATHA)

MEMBER (A)

MEMBER (J)

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