“Master-Servant Relationship Ended On Retirement”: Patna High Court Sets Aside Recovery Of Employee’s Excess Salary Ordered After 12 Years Without Notice

The Court observed that after retirement, the master-servant relationship between the employee and the University comes to an end, and therefore, the University authorities could not reduce the petitioner’s pay scale merely based on objections raised by the Pay Verification Cell of the State Government without following due procedure and principles of natural justice.

The Court was hearing a writ petition filed by a retired Head Assistant (Accounts) of R.N. College, Pandaul, challenging the pay verification certificate issued by the Pay Verification Cell, whereby his pay scale was revised downward, and an amount of Rs. 22,08,744 was treated as recoverable on account of alleged excess salary paid to him.

A Bench of Justice Ritesh Kumar observed: “The petitioner superannuated on 30.06.2010 and admittedly by the pay fixation, whereby his pay-scale has been reduced, was done after almost 12 years of his retirement and that too without issuing any notice to the petitioner, …After his retirement in 2010, the master and servant relationship came to an end and the University was not justified in reducing the pay-scale of the petitioner, only on the basis of the directions issued by the State Government, without issuing any notice to the petitioner or without giving him any opportunity to rebut the objections made by the Pay Verification Cell of the State Government.”

Advocate Shashi Bhushan Singh appeared for the petitioner. Madhaw Pd. Yadaw, GP-23 and Advocate Iqbal Asif Niazi appeared on behalf of the respondents.

Background

The petitioner was appointed as Typist-cum-Assistant in R.N. College, Pandaul, in 1968. After the college was taken over by the State Government in 1977, his services came under the University establishment. Subsequently, he was promoted to the post of Head Assistant with effect from 01.01.2006 on the recommendation of the University Selection Committee.

According to the petitioner, the Statutory Pay Fixation Committee of Lalit Narayan Mithila University fixed his pay in Pay Band Rs. 15600-39100 with Grade Pay Rs. 6600. The petitioner thereafter superannuated on 30.06.2010 and retirement benefits were paid to him based on the aforesaid fixation.

Subsequently, objections were raised by the Pay Verification Cell of the State Government regarding the petitioner’s pay fixation. Based on those objections, the petitioner’s pay scale was revised downward to Pay Band Rs. 9300-34800 with Grade Pay Rs. 4600, and an amount of Rs. 22,08,744 was shown recoverable from him as alleged excess payment.

Aggrieved thereby, the petitioner approached the High Court, contending that the reduction in pay scale and consequential recovery proceedings had been initiated without issuance of notice or grant of opportunity of hearing.

Court’s Observation

The High Court examined earlier judgments governing objections raised by the Pay Verification Cell in relation to the fixation of pay of university employees.

The Court noted that the petitioner had relied upon the judgment rendered in Suray Deo Paswan v. State of Bihar & Ors., wherein a Coordinate Bench of the High Court, after considering the earlier decision in Kedar Nath Pandey v. State of Bihar & Ors., had set aside a pay verification certificate issued by the State Government and remitted the matter back for fresh consideration in accordance with the procedure laid down therein.

The Court observed that the earlier judgments had specifically held that where objections are raised by the Pay Verification Cell against pay fixation made by the Statutory Pay Fixation Committee of the University, the State authorities are first required to communicate those objections to the University authorities. The University authorities must thereafter issue notice to the concerned employee, grant him an opportunity to respond to the objections, and only thereafter can the Statutory Pay Fixation Committee undertake fresh fixation of pay.

The Bench observed that in the present case, no such exercise had been undertaken before reducing the petitioner’s pay scale and directing recovery of Rs. 22,08,744 from his retiral dues.

The Court also referred to the decision in Kedar Nath Pandey, wherein the High Court had held: “The decision contained in Annexure-8 series has been passed in gross violation of the principles of natural justice because the decision so taken by the Pay Verification Cell has serious civil consequences for these petitioners.”

The Court further relied upon the judgment in Rajendra Patel v. State of Bihar, wherein it had been observed: “The decision taken by the Director, Higher Education after superannuation of the petitioners cannot sustain as the relationship of master and servant came to an end and further the Auditor of the State Government has no jurisdiction in the matter of pay fixation of the employees of the University.”

Applying the aforesaid principles to the present case, the High Court observed that the petitioner had retired on 30.06.2010, whereas the impugned reduction in pay scale had been carried out almost twelve years later and admittedly without issuance of any notice.

The Court held that after retirement, the relationship of master and servant had ceased, and therefore the University authorities could not have reduced the petitioner’s pay scale merely based on objections raised by the Pay Verification Cell without granting him an opportunity to rebut those objections.

The Bench further observed that recovery proceedings initiated against the petitioner were also contrary to the principles laid down by the Supreme Court in State of Punjab v. Rafiq Masih (2015) and Thomas Daniel v. State of Kerala.

Conclusion

The Patna High Court held that the pay verification certificate reducing the petitioner’s pay scale and directing recovery of alleged excess salary from his retiral dues was unsustainable in law and liable to be set aside.

Accordingly, the Court quashed the impugned pay verification certificate and held that the petitioner would be entitled to salary and retirement benefits on the basis of the original fixation made by the Statutory Pay Fixation Committee of the University.

The Court further directed refund of Rs. 22,08,744, if already recovered or adjusted from the petitioner’s retiral dues, within three months.

Cause Title: Pitamber Jha v. The State of Bihar & Ors.

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