Blatant Violation: Karnataka HC Directs Payment Of Benefits To Retd Govt Employee Who Was Denied Pension Without Inquiry, Imposes ₹1 Lakh Cost

The Karnataka High Court has come to the aid of a former employee of Hubli Electricity Supply Company Limited (HESCOM) on whom the company imposed a huge recovery of Rs 86,52,163 and even 11 years after superannuation, denied him a pension and other terminal benefits.

A single judge bench of Justice M Nagaprasanna allowed the petition filed by A.H.Makandar and quashed all the amount recovery initiated against him and directed the Company to settle and pay the pension and all the terminal benefits on his superannuation with effect from 31-05-2013 along with interest at the rate of 6% p.a. from the date they became due, till the date of payment.

Further, it imposed a cost of Rs 1 lakh on the company which is to be paid to the petitioner within four weeks.

The bench said “There cannot be a better illustration of the employer taking the employee's rights for a ride and imposing huge recovery of `86,52,163/- against the petitioner. The petitioner who has retired on attaining the age of superannuation on 31-05-2013 is fighting for grant of pension even as on today after 11 years of superannuation. It is not paid on account of recoveries against the petitioner all of which have been ordered in blatant violation of the principles of natural justice.”

It added “Here is a case where without holding an inquiry orders of recovery are slapped against the petitioner time and again during his service and post retirement. Therefore, for the reasons that recoveries are effected without even conducting a departmental inquiry worth the name in tune with the Regulations, the orders impugned would fly on the face, for it being passed in blatant violation of every known cannon of law and the petition deserves to succeed.”

It was stated that between 2005 and 2007, the petitioner was working as a Section Officer at Hidkal in Raibag Taluk, and during the said period, it was alleged that he had failed to return 69 failed transformers to the stores and had thereby caused a loss to the Company to the tune of Rs 20,03,952.

It was alleged that a notification was thereafter issued that there was a shortage of 36 store materials amounting to Rs 66,23,333/- out of which 11 items were valued at Rs 7,70,381/- which was invoiced by the petitioner and a direction was issued to recover the said amount. It was submitted that this was issued without holding any inquiry or hearing the petitioner.

During the pendency of all these proceedings, the petitioner submitted that he had retired upon attaining the age of superannuation, but his pension was not settled despite the passage of 3 years.

Thereafter, it was submitted that the Superintending Engineer of the Division ordered the release of only 25% of the pension to be the provisional pension, 50% of the DCRG amount and no commutation.

It was stated that the recovery thus was 75% of pension, 50% of DCRG and 100% of commutation towards loss caused on account of the alleged acts of the petitioner, without any inquiry.

Subsequently, it was argued that an internal report was submitted by an Executive Engineer which resulted in another order of recovery being passed for a sum of Rs 50,30,087/-. It was stated that the recovery was on the basis of a report of the Committee appointed to ascertain shortage of materials in Jamakhandi stores where the petitioner had worked.

It was submitted that again, on a detailed deduction statement proposal, another recovery of Rs 86,52,163/- was proposed from the petitioner leading to no pension being granted to the petitioner.

The bench on going through the records said that what shocked the conscience of the Court was that the Company has behaved as if it is the personal fiefdom of the officers manning the office.

They appear to have blissfully forgotten that there are Rules and Regulations to be followed before imposing any penalty. The petitioner who was an employee regularly appointed, is treated as a chattel and is imposed penalty after penalty of recovery of amounts initially from the salary of the petitioner, and the latest from the pension of the petitioner. No inquiry worth the name has ever been conducted against the petitioner, it added.

It observed that no notice was issued to the petitioner seeking to show cause as to why recovery should not be made, which was the least expected of any employer either private or public, with the company in the case at hand being State under Article 12 of the Constitution of India.

“Huge recoveries are to be effected from the salary/pension of the employee it ought to precede by a regular departmental inquiry; fixing of accountability, determination of loss and hearing the petitioner as to why recovery should not be made on such determination after following due procedure in law. None of these necessary procedures for initiating recovery are even followed by the Company against the petitioner,” it stated.

Court noted that the petitioner who retired on attaining the age of superannuation in 2013 had been fighting for the grant of pension after 11 years of superannuation, and it was not being paid on account of recoveries which had been ordered in blatant violation of the principles of natural justice.

Accordingly, it directed that all terminal benefits that the petitioner is entitled to shall be released to the petitioner without any loss of time, including the costs of litigation and payment of interest for withholding the terminal benefits. 

Appearance: Advocate Ramachandra A Malli for Petitioner.

HCGP V.S. Kalsurmath, for R1.

Advocate B.S.Kamte, for R 2 to 7.

Citation No: 2024 LiveLaw (Kar) 124

Case Title: A.H.Makandar AND State of Karnataka & Others

Case No: Writ Petition No 104356 OF 2022

Click Here To Read/Download Order