P E MATHEWS vs THE GENERAL MANAGER SOUTHERN RAILWAY HQ OFFICE PARK TOWN CHENNAI on 31 December 2024

O R D E R

HON'BLE Ms.V.RAMA MATHEW, ADMINISTRATIVE MEMBER Briefly the facts are as under : The applicant was appointed as a Assistant Station Master in the scale Rs.330-560/1200-2040 in the Madras Division of Southern Railway on 30.06.1985 as a probationer and on 23.01.1986 on regular basis. He was promoted as AYM (SM-III) in the scale Rs.425-640/1400- 2300 with effect from 17.09.1988. In 1986 he had applied for a transfer to Trivandrum Division in terms of Para 226 of IREC Vol.I, which application materialized in 1996. His last pay in Madras Division was Rs.1680/- in the scale Rs.1400-2300 with effect from 01.09.1995. Upon joining the Trivandrum Division on 11.07.1996 the applicant was reverted to the lower grade of ASM in the scale Rs.1200-2040 on bottom seniority. His pay was fixed at Rs.1680/- in the scale Rs.1200-2040 which is a common pay point for both scales of Rs.1400-2300 and Rs.1200-2040, which is the scale he was drawing in his previous charge, and the rules provide for such a pay fixation. He was not granted the annual increment due on 01.09.1996 but only on 01.07.1997. In the

interregnum the applicant was selected as AYM (SM-III) in the scale Rs.1400-2300 and his pay fixed at Rs.1760/- with effect from 04.10.1997. The above pay fixation was revised with retrospective effect from 01.01.1996 in terms of 5th Pay Commission scales as below : 01/01/96 Rs.5300 in scale Rs.5000-150-8000 11/07/96 Rs.5250 + 50 (PP) in scale Rs.4500-125-7000 01/07/97 Rs.5375 in scale Rs.4500-125-7000 04/10/97 Rs.5600 in scale Rs.5000-150-8000 (YM)

2. As there were no further promotion he was granted financial upgradation (ie., 2nd MACP) with effect from 01.09.2008 (due on completion of 20 years) on the introduction of the MACPS and placed in PB Rs.9300-34800 + GP Rs.4600/- and on completion of 30 years of service he was granted the 3rd financial upgradation ie., 3rd MACP with effect from 23.01.2016 and placed in PB Rs.9300-34800 + GP Rs.4800/-. His pay was revised as Rs.62200/- ie. GP Rs.4600/- level 7 with effect from 01.01.2016 under the 7th Pay Commission pay structure and consequently revised as Rs.64100/- ie. GP Rs.4800/- level 8 with effect from 23.01.2016. His pay was raised to Rs.66000/- with effect from 01.01.2017 by increment and to Rs.68000/- (GP Rs.4800/- level 8) with effect from 01.01.2018 by annual increment. The applicant sought

voluntary retirement from service with effect from 20.08.2018, which was agreed to and he retired from service on 20.08.2018. While waiting for his retirement dues the applicant was served with a letter No.V/P.524/II/PC/Optg.1 dated 14.11.2018 proposing to withdraw his 3rd financial upgradation for the reason that the Associate Finance Manager (3rd respondent) had pointed out that the same was granted erroneously. A chart annexed to the said letter shows the proposed reductions in pay leading to lumpsum recovery from terminal benefits which is produced as Annexure A-1.

3. Aggrieved by the impugned Annexure A-1 order withdrawing the 3rd financial upgradation in PB Rs.9300-34800 with effect from 23.01.2016 and the consequential recovery from pay, this O.A had been filed.

4. Prior to the filing of the O.A., on receipt of Annexure A-1 letter, the applicant submitted a representation on 20.11.2018 to the respondents to desist from the proposal and to settle his dues as per the extant rules produced as Annexure A-2. However, the 3rd respondent issued PPO No.20197060400008 dated 16.01.2019 based on reduced pay as proposed in Annexure A-1 letter, without having responded to

Annexure A-2 representation. This is produced as Annexure A-3 along with Annexure A-4 statement of details of terminal benefit. Annexure A-5 representation was consequently filed, but no response was received to that either. Hence, the present O.A.

5. In the O.A the reliefs sought are withdrawal of Annexure A-1 letter proposing withdrawal of the 3rd MACP, quashing of Annexure A-3 and Annexure A-4 to the extent of fixation of pay as per the terms of Annexure A-1 letter and the recovery made from the terminal benefits indicated at Annexure A-4 from his settlement dues.

6. It has been argued that subsequent to applicant's retirement on 20.08.2018, the Railway Board issued letter No.PC-V/2018 MACP/I(SM) dated 25.02.2020 (RBE No.26/2020) by which it was stated that since the posts of Assistant Station Master in Pay Matrix Level 5 of 7th CPC (Grade Pay Rs.2800/- in 6th CPC) and Station Master Grade-III in Pay Matrix Level 6 of 7th CPC (Grade Pay Rs.4200/- in 6th CPC) were merged, the promotion of the applicant from Assistant Station Master to Station Master Grade-III was ignored by the 2nd respondent. This is produced as Enclosure R-1. In addition to that, the

2nd MACP granted to him on 01.09.2008 in the Grade Pay Rs.4600/- was treated as the 1st MACP granted to him. According to the RBE No.26/2020 it is stated that in the above circumstances the applicant could be granted 2nd and 3rd MACP with effect from 16.02.2018 ie., with effect from 7th Pay Commission. The 2nd respondent had granted the 2nd MACP in Level 8 (Rs.9300-34800 + GP Rs.4800/-) with effect from 16.02.2018 and 3rd MACP in Level 9 (Rs.9300-34800 + GP Rs.5400/-) with effect from 16.02.2018. Subsequent to that Annexure R-2 Revised Pension Payment Order dated 08.01.2021 issued to the applicant by the 2nd respondent. Arrears of MACP, gratuity, leave salary and commutation amount was also paid to the applicant. The respondents granted the 3 rd MACP with effect from 16.02.2018 in GP Rs.5400/- in Pay Matrix Level 9 which is more than the GP Rs.4800/- in Level 8 as prayed for by the applicant in the O.A. These particulars were stated by the respondents in paras 15 and 16 of the reply statement. In this circumstance the respondents claim right to correct and adjust MACP as per Annexure A-1 order. The decision of the Hon'ble Supreme Court in Chandi Prasad Uniyal & Ors. vs. State of Uttarakhand & Ors., 2012 (8) SCC 417 categorically upheld that the employer's right and responsibility to recover the amount calculated and paid to the employee when received in pay fixation erroneously.

7. The fundamental argument of the applicant is as under : Though nothing stated is in the Annexure A-1, it seems that the same was issued on the basis of the PB Circular No.45/2016 dated 26.04.2016, produced as Annexure A-8. The Railway Board Clarification on the basis of which Annexure A-8 Circular was issued was Annexure A-9. The said Annexure A-8 Circular and Annexure A-9 Clarification are liable to be set aside since they effectively nullified the O.M issued by the DoP&T on the subject which has been accepted by the Railways. The General Rule is that where ever an official, in accordance with the terms and conditions of transfer on own volition to a lower post, is reverted to the lower post/grade from the promoted post/grade before being relieved for the new organization/office, such past promotion in the previous organization/office will be ignored for the purpose of MACPS in the new organization/office. In the pretext of the Clarification at Annexure A-8 and Annexure A-9, the General Rule has been given the go by. On inter divisional transfer pay was fixed on the basis of the Statutory Rules and if Annexure A-8 and Annexure A-9 Clarification was implemented no one who came on inter divisional transfer on reversion was entitled to get financial upgradation under MACPS ignoring the promotion earned in the parent department. Apart from that, the clarification was relevant and required only when there was any

confusion or ambiguity. The DoP&T OM dated 04.10.2012 is produced as Annexure A-10, the Railway Board Order No.8/2013 dated 31.01.2013 and RBE No.147/2015 dated 23.11.2015 are produced as Annexure A-11 and Annexure A-12 respectively. The pay on inter divisional transfer was fixed on the basis of Annexure A-5 Statutory Rules and the applicant was not having any option and in the circumstances, Annexure A-8 and Annexure A-9 orders are also required to be set aside.

8. The respondents traversing the factual matrix have argued thus far that the applicant’s pay was protected on transfer to Trivandrum Division and that since Annexure A-8 clarified that the promotion earned in the previous organization ought to be reckoned while giving promotion/MACP in the new organization, the inadvertent 3rd MACP granted in the Grade Pay Rs.4800/- was withdrawn as he was not entitled to the same as the MACP Scheme envisages three financial upgradations only when there are no regular promotion. Since the applicant has earned two promotions one in the previous division and one in the Trivandrum Division, he was given 3rd financial upgradation. The delay in granting of his financial settlements on his retirement was because of the three month notice period which was required to complete

the formalities like obtaining the DAR and vigilance clearance etc., to decide whether the request for voluntary retirement can be accepted or not.

9. Inter divisional transfer can only happen to posts where there is direct recruitment and the applicant had agreed to join in the lower post at his request and although the applicant had joined lower post he had retained his pay which was received by him in the promoted post by way of protection. Had he not retained his pay by way of pay protection, his pay would be Rs.4750/- in scale Rs.4500-7000 instead of Rs.5300/- in scale Rs.5000-8000. It is also argued that the applicant has misunderstood the relevant rules and has misled himself. The claim of the applicant is against Annexure A-8 as per which, when pay protection was effected on one’s own request transfer, the promotion earned in the new organization to the same post from which he was downgraded and posted in the new organization to carry out the request transfer, the promotions earned in the old and new organization are to be taken into account when giving MACP benefits which allows the combined entitlement of three promotions or three financial upgradations under MACP Scheme in a period of 30 years.

10. It is argued that vide Railway Board’s Letter No.PC V/2018/MACP/I(SM) dated 25.02.2020 (RBE No.26/2020) the promotions/reversion and MACP already granted in the merged scale of Assistant Station Master in pay matrix level 5 of 7th CPC (Rs.2800/- Grade Pay in 6th CPC) and Station Master III in pay matrix level 6 of 7th CPC (Rs.4200/- Grade Pay in 6th CPC) are to be ignored as on 16.02.2018 ie., the date from which merger takes place and the 3rd MACP already granted was treated as 1st MACP.

11. The challenge of the applicant is actually on the 3rd MACP of Rs.4800/- instead of Rs.5400/- and its cancellation. The amount of Rs.14700/- was recovered from his gratuity. The question of overpayment arises out of withdrawal of MACP for the intervening period. While the respondents have cited the decision of the Hon'ble Supreme Court in Chandi Prasad Uniyal (supra), a later decision of the Hon'ble Supreme Court in State of Punjab & Ors. vs. Rafiq Masih (Whitewasher) AIR 2015 SC 696, the decision of Chandi Prasad Uniyal (supra) was considered and only then the principle of recovery laid down in the last two paragraphs of the decision, which is squarely applies here. Subsequent to the O.A the 3rd MACP to the Grade Pay of Rs.4800/- was granted. The Grade Pay of Rs.2800/- and Rs.4200/- was

merged into Grade Pay of Rs.4800/- and therefore, the benefit was granted from 16.02.2018 ie., from the date of merger and because of the merger would be no further proposal of MACP and therefore the 3rd MACP at Rs.5400/- Grade Pay was granted with effect from the same date. Since the benefits which had been granted were greater than the amount prayed for in the O.A, the amount was withheld from the retirement benefits. It has been argued that with the cancellation of the 3rd MACP from 2016 the pending issue now is grant of 3rd MACP between 23.01.2016 and 16.02.2018 on which date it has been refixed and the recovery has been made of Rs.14700/- from the gratuity.

12. It is clear from the factual matrix that the applicant had been given one promotion, one MACP ie., with effect from 01.09.2008 on completion of 20 years of service and was, therefore, eligible for the 3rd MACP with effect from 01.09.2018. The rectification that has happened is adjustment of differential amount between 16.02.2018 and 01.09.2018 of the amount paid as 3rd MACP. This appears to be the correct position. In so far as the recovery of the amount is concerned, if we examine the categories listed in the decision of Rafiq Masih (supra), para 11 of the Rafiq Masih (supra) will be applicable as he is a Class III employee and the retirement falls within two years of recovery. The recovery of over

payment from the pensionary benefits is not covered in the dictum and since the granting of the benefit of 3rd MACP in 2016 was incorrect, the 3rd MACP was granted in 2018 and the differential can be recovered from the pensionary benefits at the time of retirement either in equal installment or in lumpsum amount. The amount being Rs.14700/- it is apparent that lumpsum recovery has been done which appears to be correct. Hence, the O.A is dismissed. No order as to costs. (Dated this the 31st day of December, 2024) V.RAMA MATHEW JUSTICE K.HARIPAL ADMINISTRATIVE MEMBER JUDICIAL MEMBER asp

List of Annexures in O.A.No.180/00810/2019

1. Annexure A-1 – A copy of the Letter No.V/P.524/II/PC/Optg.1 dated 14.11.2018.

2. Annexure A-2 – A copy of the representation dated 20.11.2018 submitted by the applicant.

3. Annexure A-3 – A copy of the PPO No.20197060400008 dted 16.01.2019 to the extent it sanctions the retirement benefits on the basis of reduced pay and the recovery as overpayment.

4. Annexure

A-4

– A

copy

of

the

Slip No.PEN/TVC/Settle/Details/16404488659/20-8-18 dated 29.01.2019 to the extent it sanctions the retirement benefits on the basis of reduced pay.

5. Annexure A-5 – A copy of the representation dated 25.03.2019.

6. Annexure A-6 – A copy of the Amended Rule 1313 [FR 22(1)(a)

(1) ] of the IREC vide RBE No.198 of 1991 dated 12.12.1991.

7. Annexure A-7 – A copy of the MACP Scheme published under Railway Board Letter RBE No.101/2009 dated 10.06.2009 on the authority of DoP&T OM No.35034/3/2008-Estt(D) dated 19.05.2009.

8. Annexure A-8 – A copy of the PB Circular No.45 of 2016 dated 26.04.2016.

9. Annexure A-9 – A copy of the Railway Board Letter No.PC V/2009/MCP/9/SR dated 18.04.2016.

10. Annexure A-10 – A copy of the OM No.35034/3/2008-Estt.(D) (Vol.II) dated 04.10.2012.

11. Annexure A-11 – A copy of the RBE No.8 of 2013 dated 31.01.2013 of the Railway Board.

12. Annexure A-12 – A copy of the RBE No.147 of 2015 dated 23.11.2015 of the Railway Board.

13. Annexure R-1 – A copy of the RBE No.81/2020 dated 18.09.2020.

14. Annexure R-2 – A copy of the Revised PPO No.20197060400008 dated 08.01.2021.

15. Enclosure R-1 – A copy of the Order No.PC-V/2018 MACP/I(SM) dated 25.02.2020 (RBE No.26/2020).

16. Enclosure R-2 – A copy of the Judgment of Hon'ble Supreme Court in Chandi Prasad Uniyal & Ors., vs. State of Uttarakhand & Ors., (SCC 2012 (8) 417. _______________________________