Retrospective Pay Reduction Without Prior Notice And Recovery Of Excess Payments After 19 Years Is Not Permissible : Delhi High Court

Background Facts

The petitioner initially joined the Border Security Force (BSF) as a Constable on 10.11.1978. He joined the Delhi Police by way of deputation on 05.02.1986. Thereafter he was absorbed in the Delhi Police on 05.12.1988 where he continued to serve till his superannuation on 31.01.2018. After being absorbed in the Delhi Police, petitioner's pay was correctly fixed at Rs.960 + Deputation Allowance @10%. Consequently, he continued to draw all due increments and upgradations in pursuance of the said pay fixation. After a period of 19 years, the respondents on 17.11.2017 suddenly passed an order directing reduction of petitioner's pay without any notice. In pursuance of this order, the respondents also directed that a sum of Rs.2,97,879/- be recovered from the petitioner.

Aggrieved by the respondent's order, the petitioner approached the Central Administrative Tribunal (the Tribunal), in March 2018, by when a sum of Rs.45,778/- had already been recovered from his salary. Further upon his superannuation, the balance sum of Rs.2,52,101/- was also deducted from the petitioner's gratuity. The Tribunal vide the order dismissed the application filed by the petitioner by holding that the petitioner was not entitled for any deputation allowance, which was wrongly paid to him, and no prior notice was required to be given to him as the petitioner was no longer on deputation.

Aggrieved by the same, the petitioner filed the writ petition.

It was contended by the petitioner that the respondents could not reduce his pay retrospectively after a period of 19 years, and that too without putting him to any notice. It was also urged that no recoveries could be made from the petitioner for the payments made to him for the last 19 years. The petitioner relied on the decisions of Bhagwan Shukla vs. Union of India & Others and State of Punjab & Ors. vs. Rafiq Masih & Ors.

On the other hand it was contended by the respondents that after the petitioner had been absorbed in Delhi Police, he was not entitled for any deputation allowance, which was wrongly paid to him. Therefore, respondents were justified in reducing his pay, for which no prior notice was required to be given to him as it was an admitted position that the petitioner was no longer on deputation w.e.f. 05.12.1988.

Findings of the Court

It was observed by the court that no show cause notice was issued to the petitioner by the respondents before reducing his pay with retrospective effect and consequently deciding to make recoveries from his pay and gratuity. Therefore the impugned order was liable to be set aside, being violative of principles of natural justice. The case of Bhagwan Shukla vs. Union of India & Others was relied upon by the court wherein the Supreme Court held that the pay of the employee cannot be reduced with retrospective effect without giving him any opportunity to show cause.

It was further observed that the petitioner even after being absorbed in the Delhi Police erroneously continued to receive deputation allowance to which he was not entitled to after absorption. The court granted an opportunity to the respondents to correct error in the fixation of the petitioner's pay scale after issuing him a show cause notice. It was held by the court that even if the respondents find that petitioner's pension needs to be reduced, no recoveries will be made from him.

It was further observed by the court that the petitioner had been drawing a higher pay for almost 19 years, therefore he would be covered within the ambit of the directions issued in State of Punjab & Ors. vs. Rafiq Masih & Ors. In this case it was held by the Supreme Court that the employers cannot recover excess payments in cases involving retirees, or those nearing retirement. Further recovery is also barred for payments made for more than five years, or if recovery is excessively harsh or unfair.

Hence, both the Tribunal's order and the respondents' order dated 17.11.2017 were set aside by the court. Further it was directed by the court that the amount recovered from the petitioner should be refunded within six weeks.

With the aforesaid observations, the writ petition was disposed of.

Case Name : Asha Ram Nehra v. Commissioner of Police and Anr.

Citation: 2025 LiveLaw (Del) 234

Case No. : W.P.(C) 3903/2019

Counsel for the Petitioner : Samarth Luthra, Adv.

Counsel for the Respondents : Amit Tiwari, CGSC with Farmaan Ali, Ahushi Srivastava and Asi Jagbir, Advs. with ASI Jaybir Singh