Pawan Kumar Sharma vs SCHOOL EDUCATION DEPARTMENT on 31 December 2025

ORDER

Per: - Rajinder Singh Dogra, Judicial Member

1. The applicant has filed the present Original Application under Section 19 of the Administrative Tribunals Act, 1985 seeking the following reliefs: - a) Prayer seeking Quashing of the impugned order i.e., letter No. DFOK/ 359-62 Dated: - 26-03- 2025 issued by respondent no. 5 wherein it has been requested that the amount of Rs. 18,43,520/- may be deducted from the applicant's retirement benefits viz-Cash-in-lieu of leave salary, Gratuity etc. and Treasury Officer Basohli i.e., respondent no. 8 is requested to affect the recovery from the Cash-in-Lieu of leave salary of the applicant, in the given facts and circumstances of the case. b) Prayer seeking directions upon the respondent to release the gratuity of the applicant which has been withheld, in the given facts and circumstances of the case.

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c) Any other relief which this Hon'ble Tribunal deems fit in the given facts and circumstances of the case in favour of the applicant and against the respondents may kindly be passed.

2. The facts of the case as averred by the applicant in his pleadings, are as follows: - a) The applicant, a retired government servant, entered service in the School Education Department in the year 1986 pursuant to his selection by the then J&K State Subordinate Services Recruitment Board. He initially joined as a Teacher and, during the course of a long and unblemished career spanning nearly four decades, served the department in different capacities at various stations across the Union Territory of Jammu and Kashmir. b) On account of his academic qualifications, experience, and service record, the applicant was promoted as Lecturer (Physics) and thereafter entrusted with higher administrative responsibilities. From time to time, he was posted as In-charge by HARSHIT YADAV HARSHIT YADAV

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Principal at various Higher Secondary Schools and institutions, including DIET Basohli. Ultimately, the applicant superannuated from service in November 2024 while serving as Principal, DIET Basohli. c) Upon retirement, the applicant initiated the process for settlement of his pensionary and retiral benefits, including gratuity, leave encashment, and final General Provident Fund (GPF) settlement. While pursuing his pension papers through the concerned offices, the applicant was informed by the Treasury Office that the release of his gratuity had been withheld on the basis of a communication issued by the Chief Accounts Officer, District Fund Office, Kathua. d) The applicant was thereafter confronted with the impugned communication dated 26.03.2025, whereby respondent No. 5 directed recovery of an amount of ₹18,43,520/- from the applicant’s retiral dues, alleging that excess interest had been erroneously credited to his GPF account over the years and withdrawn by him.

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e) It is the categorical case of the applicant that throughout his service tenure, his pay fixation, increments, service verifications, and GPF withdrawals were processed, sanctioned, and approved by the competent authorities in accordance with the applicable rules. The applicant never misrepresented any fact, nor did he manipulate or interfere with the maintenance of his GPF account. f) The applicant asserts that the alleged excess interest pertains to an accounting error committed by the Fund authorities during the financial year 2014–15, at a time when the applicant was not functioning as Drawing and Disbursing Officer (DDO) but was posted merely as Head of Department at DIET Basohli. The statutory responsibility of maintaining and calculating GPF accounts, including interest computation, rests exclusively with the Accounts/Fund Office. g) It is further pleaded that the applicant was never put to notice, nor was he afforded any opportunity of explanation before issuance of the recovery order. The impugned action of by HARSHIT YADAV HARSHIT YADAV

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withholding gratuity and directing recovery from leave encashment, that too after retirement, is stated to be arbitrary, violative of principles of natural justice, and contrary to settled law governing recovery from retired employees. h) The applicant has relied upon settled judicial precedents to contend that recovery of alleged excess payment from a retired employee, particularly when such payment was not obtained by fraud or misrepresentation, is impermissible in law and causes grave hardship.

3. The respondents have filed their written statement wherein they have averred as follows: - a) The respondents submit that the Original Application is misconceived and liable to be dismissed. The recovery proceedings have been initiated strictly in accordance with the applicable statutory rules after detection of a substantial accounting error in the applicant’s General Provident Fund account.

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b) It is stated that upon receipt of the applicant’s final GPF refund case in March 2025, scrutiny of records revealed that due to an inadvertent system error, interest had been wrongly credited to the applicant’s GPF account for an extended retrospective period, far beyond the period for which interest was actually admissible. c) According to the respondents, while only a nominal interest amount was due for the relevant year, a much larger amount running into several lakhs was erroneously credited. This excess interest continued to accumulate over time and was repeatedly withdrawn by the applicant, resulting in a substantial minus balance in his GPF account at the time of retirement. d) The respondents contend that the applicant, having held senior administrative posts including that of Principal, and having functioned as Drawing and Disbursing Officer during substantial periods of his service, was under a statutory obligation to verify the correctness of his annual GPF

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statements and report discrepancies to the Accounts Officer within the prescribed time. e) It is asserted that the error in interest calculation was apparent on the face of the annual statements, as the credited interest was disproportionately high. Despite this, the applicant neither reported the anomaly nor refrained from withdrawing the excess amounts. f) The respondents submit that the case does not fall within the protective umbrella of judicial precedents restraining recovery from retired employees, as those judgments apply only where the employee is innocent of knowledge or involvement. In the present case, it is alleged that the applicant had constructive, if not actual, knowledge of the excess credit and benefited from it. g) The respondents further submit that under the relevant provisions of the J&K Civil Service Regulations and GPF Rules, the Government is empowered to effect recovery of losses caused to the public exchequer due to negligence, misconduct, or failure to discharge statutory duties.

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h) It is clarified that the withholding of gratuity and leave encashment is only a temporary measure to safeguard government revenue pending recovery of the excess amount and does not amount to denial of pensionary benefits per se. i) The respondents also object to the interim protection granted by the Tribunal, contending that the same was passed without recording reasons as mandated under the Administrative Tribunals Act and deserves reconsideration. j) On these premises, the respondents pray for dismissal of the Original Application, asserting that the impugned action is legal, justified, and taken in public interest.

4. The applicants have filed their rejoinder to the reply statement filed by the respondents wherein they have averred as follows: - a) The applicant submits the present rejoinder to controvert the allegations made in the written statements filed by the respondents, which are not only factually incorrect but also legally untenable. Save and except what is expressly admitted by HARSHIT YADAV HARSHIT YADAV

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herein, all averments, allegations, and inferences drawn by the respondents are denied. b) At the outset, it is submitted that the respondents have attempted to shift their own admitted accounting lapse onto the applicant by making unfounded allegations of misuse of position, misconduct, and even criminality, without any supporting material, enquiry, or finding by a competent authority. c) In reply to the assertion that the applicant made nine withdrawals from his GPF account, it is clarified that out of these withdrawals, five were refundable advances and four were non-refundable withdrawals. All refundable advances were duly and fully repaid in accordance with rules. The last withdrawal was sanctioned by the competent authority, namely the Director School Education Jammu, and the applicant merely acted as a Drawing and Disbursing Officer for disbursement after receipt of sanction. Delay in drawal occurred due to procedural by HARSHIT YADAV HARSHIT YADAV

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movement of files and treasury-level constraints, and not due to any action attributable to the applicant. d) With respect to the alleged erroneous interest credited during the year 2014–15, it is submitted that the respondents have selectively highlighted only one Transfer Entry pertaining to Samba district, whereas in reality, four separate Transfer Entries relating to different districts were processed simultaneously during the same period. The interest computation was done centrally by the Fund Office, and the applicant had no role whatsoever in calculation, posting, or verification of interest entries. e) The applicant specifically denies the allegation that he was functioning as Drawing and Disbursing Officer during the period when the alleged error in interest calculation occurred. During the relevant period, the applicant was posted as Head of Department at DIET Basohli and was subordinate to the Principal, who alone was the designated DDO. The respondents by HARSHIT YADAV HARSHIT YADAV

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have incorrectly and casually attributed the role of DDO to the applicant for periods where he was not holding such charge. f) The respondents have themselves admitted that the error in interest calculation occurred due to a mistake at the level of the Fund Office. Having admitted this, it is impermissible for them to subsequently contend that the responsibility lay upon the applicant to detect and correct a specialized accounting error committed by trained accounts personnel entrusted with maintenance of GPF accounts. g) The applicant submits that under the applicable GPF Rules, the responsibility for maintenance, verification, and computation of interest vests squarely with the Accounts Officer. An employee is entitled to repose trust in the statutory mechanism maintained by the State and cannot be expected to audit or second-guess complex interest calculations performed by specialized departments. h) The analogy drawn by the respondents that the applicant ought to have detected the error is legally misconceived. An employee by HARSHIT YADAV HARSHIT YADAV

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receives annual statements as an end-user and is not equipped with the backend data, transfer entry details, or calculation matrices used by the Fund Office. Expecting a non-accounts officer to identify such errors is unreasonable and contrary to administrative realities. i) The allegation that the applicant deliberately withheld information or misused his position is emphatically denied. The applicant was never issued any notice, show cause, or communication seeking clarification prior to issuance of the recovery order. Instead, the respondents directly addressed the Treasury Officers, resulting in abrupt withholding of gratuity without even informing the applicant. j) The applicant submits that upon learning of the recovery proposal, he attempted to contact the concerned officials to seek clarification and reconciliation of accounts. However, no meaningful response was extended, compelling the applicant to approach this Hon’ble Tribunal as a measure of last resort.

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k) The respondents’ attempt to distinguish the judgment of the Hon’ble Supreme Court in Rafiq Masih is misconceived. The applicant neither misrepresented facts nor committed fraud. Mere receipt of excess payment, arising out of an admitted departmental error, does not ipso facto establish knowledge or culpability, particularly in the absence of any disciplinary or judicial finding. l) It is further submitted that recovery from retiral benefits, especially gratuity, without conclusion of any departmental or judicial proceedings, is contrary to settled law. The respondents’ reliance on enabling provisions for recovery is misplaced, as no proceedings were initiated during service, nor has any finding of loss due to negligence or fraud been recorded. m) The sweeping and stigmatic allegations of criminal misappropriation and breach of trust levelled against the applicant are not only baseless but also dehors any lawful by HARSHIT YADAV HARSHIT YADAV

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process. Such allegations cannot be sustained merely on conjecture and are liable to be ignored. n) The applicant reiterates that he retired with an unblemished service record and that the impugned recovery, sought to be enforced post-retirement, is harsh, inequitable, and legally impermissible. o) The applicant reserves the right to pursue appropriate remedies against defamatory and reckless allegations made against him, which have no foundation in record.

5. Heard learned counsel for the parties and perused the pleadings made by them.

6. The present Original Application has been filed by the applicant under Section 19 of the Administrative Tribunals Act, 1985, calling in question communication dated 26.03.2025 issued by the Chief Accounts Officer, District Fund Office, Kathua, whereby recovery of an amount of ₹18,43,520/- has been proposed from the applicant’s retiral dues on account of excess amount drawn from his General by HARSHIT YADAV HARSHIT YADAV

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Provident Fund (GPF) account, and consequential withholding of gratuity till issuance of No Objection Certificate.

7. The applicant seeks quashing of the said communication and release of gratuity and other retiral benefits.

8. From the pleadings and record, the following facts are not in dispute:  The applicant superannuated in November 2024 while serving as Principal, DIET Basohli.  During his service career, the applicant made multiple withdrawals from his GPF account, including withdrawals close to the date of retirement.  On scrutiny of the final GPF case, it was detected by the District Fund Office that due to an error, interest far in excess of admissible entitlement had been credited to the applicant’s GPF account over a prolonged period.

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 On adjustment of the erroneous interest component, a minus balance of ₹18,43,520/- emerged, which had already been drawn by the applicant.  Based on the said detection, recovery proceedings were initiated by the Fund Office, and the Treasury was directed not to release gratuity till clearance of the liability.

9. The principal issue that arises for consideration is:  Whether recovery of ₹18,43,520/- from the retiral benefits of the applicant, arising out of excess GPF interest credited and withdrawn by him, is legally impermissible merely because the applicant has retired, and whether the applicant is entitled to protection under the principles laid down in Rafiq Masih’s case? A. Nature of the Excess Payment

10. The material on record clearly establishes that the excess amount is not a case of over-payment of salary or allowance due to erroneous pay fixation, but a case where undue and erroneous by HARSHIT YADAV HARSHIT YADAV

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interest was credited to the applicant’s GPF account and withdrawn by him over time, resulting in a substantial financial loss to the public exchequer.

11. The GPF is a contributory fund, and the subscriber is entitled only to the amount actually standing to his credit in accordance with rules. Any withdrawal in excess of the lawful balance cannot be treated as a benign or technical error. B. Knowledge and Responsibility of the Applicant

12. The respondents have placed on record annual GPF statements showing disproportionately high interest credits which, on the face of it, were wholly inconsistent with the actual principal amount.

13. The applicant was not a Class-IV or Group-D employee lacking exposure to financial administration. He admittedly held senior administrative posts including that of Principal and Drawing & Disbursing Officer during substantial periods of service.

14. Under the GPF Rules, a subscriber is required to verify annual statements and bring discrepancies to the notice of the Accounts by HARSHIT YADAV HARSHIT YADAV

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Officer within the prescribed time. The prolonged silence of the applicant, coupled with repeated withdrawals including one shortly before retirement, clearly negates the plea of complete innocence.

15. This Tribunal finds substance in the respondents’ contention that the error was detectable, and the applicant benefited from it without protest or disclosure. C. Applicability of Rafiq Masih Judgment

16. The reliance placed by the applicant on State of Punjab vs. Rafiq Masih is misplaced. The Hon’ble Supreme Court itself carved out exceptions permitting recovery where:  the employee had knowledge of excess payment, or  the payment was not a result of pure employer mistake alone, or  recovery would not be inequitable on facts.

17. In the present case, the excess amount was not passively received as salary but was actively withdrawn by the applicant from his GPF

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account, even after receipt of annual schedules reflecting abnormal interest credits. Thus, the factual foundation necessary to invoke equitable protection under Rafiq Masih is conspicuously absent. D. Recovery from Retiral Benefits – Legal Position

18. Gratuity and leave encashment, though statutory benefits, are not immune from adjustment of government dues lawfully recoverable.

19. Article 168-A of the J&K Civil Service Regulations reserves the right of the Government to recover losses caused to the exchequer, subject to law. In the present case, the recovery is not punitive but restitutionary, aimed at restoring public funds wrongly withdrawn.

20. Mere retirement does not confer a vested right to retain money not lawfully belonging to the employee. E. Alleged Violation of Natural Justice

21. The applicant has contended that no prior notice was issued. However, the record reveals that recovery proceedings arose during processing by HARSHIT YADAV HARSHIT YADAV

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of the final GPF case, and the applicant was made aware of the discrepancy before final settlement.

22. In matters of arithmetical reconciliation of GPF accounts, issuance of a detailed show-cause notice is not mandatory where recovery is based on objective accounting data and statutory audit.

23. No prejudice warranting interference is shown to have been caused.

24. The interim stay granted earlier was only a temporary measure and does not confer any substantive right. Upon final adjudication, the same stands vacated.

25. This Tribunal is satisfied that: a) The excess amount was wrongly credited and wrongly withdrawn by the applicant; b) The applicant cannot claim equitable protection after having benefited from an apparent error for years; c) The recovery action is lawful, justified, and necessary to protect public funds; by HARSHIT YADAV HARSHIT YADAV

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d) No case for interference under Section 19 of the Administrative Tribunals Act is made out.

26. Accordingly, the Original Application is dismissed.

27. The interim order dated 04.04.2025 stands vacated. The respondents are at liberty to proceed with recovery of ₹18,43,520/- in accordance with law, after due adjustment of accounts.

28. No order as to costs.

(RAM MOHAN JOHRI) (RAJINDER SINGH DOGRA) Administrative Member

Judicial Member

/harshit /

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