Correctness Of Emoluments In Final 24 Months Before Retirement Is Indisputable For Retiral Benefits: J&K High Court

Citing Article 242 of the J&K CSR Justices Sanjeev Kumar and Puneet Gupta observed,

“.. the correctness of emoluments drawn by an employee before twenty four (24) months of his retirement cannot be disputed while calculating the retiral benefits of such employee”

These observations came in response to a petition highlighting employer negligence and its impact on post-retirement entitlements. The petitioner, Tarlok Chand, was appointed as a Peon in 1987 and rose through the ranks, retiring as Head Assistant in May 2020. In 1992, Process Servers, including the petitioner, sought equal pay with their counterparts in the Excise Department. The plea was upheld, resulting in revised pay scales under SRO 75 of 1992.

However, in 2005, following complaints by the Judicial Staff Welfare Association regarding salary anomalies, the High Court directed Principal District and Sessions Judges to retrospectively re-fix the salaries of Process Servers to align with the revised scales from April 1990. Despite this, the Principal District & Sessions Judge, Kathua, failed to implement the directive, allowing the petitioner to continue receiving enhanced pay and promotions based on his pre-revised scale.

The discrepancy went unnoticed until 2020, when the Accountant General flagged the irregularity during the processing of the petitioner's retiral benefits. Consequently, portions of his pension and gratuity were withheld, prompting him to approach the Court.

After scrutinising the case's factual and legal complexities, the Court noted the employer's negligence in implementing its 2005 directive as despite instructions to re-fix the salaries of Process Servers, the Principal District & Sessions Judge, Kathua had failed to act, allowing the petitioner to draw enhanced emoluments and receive subsequent promotions. This oversight, the Court observed, was the root cause of the current dispute and entirely attributable to the employer's failure to comply with established directives.

The Court emphasized the legal protection provided by Article 242 of the Jammu and Kashmir Civil Service Rules (CSR) Vol-I which bars disputes over the correctness of emoluments drawn by an employee during the final 24 months of service. The Court firmly held that retiral benefits must be calculated based on the last pay drawn at superannuation, regardless of any prior irregularities in the salary structure. By attempting to dispute the petitioner's emoluments years after his retirement, the Accountant General contravened this principle, the court stated.

Further, the Court underscored the principles of equity, relying on the Supreme Court's judgment in Thomas Daniel v. State of Kerala (2022). It reiterated that recoveries of excess payments caused by employer errors are unjust, especially when the employee is not at fault. The petitioner, the Court noted, had drawn his salary in good faith, relying on the disbursed amount to plan his financial life and support his family. It would, therefore, be inequitable to recover the alleged excess payments at this stage, causing undue hardship to the retiree, the court maintained.

Additionally, the bench cited its own precedent in Maryam Bano v. State of J&K (2003), which reinforced that disputes raised long after emoluments are drawn cannot justify recalculating retiral benefits. The petitioner's case, the Court observed, mirrored this precedent, as the alleged irregularities had gone unaddressed for decades, demonstrating systemic administrative failures.

Clarifying that any excess payments received by the petitioner were due to employer negligence rather than any act or omission on his part the court said that the employer's failure to comply with directives and the subsequent inaction for nearly two decades could not be used to penalize the petitioner post-retirement.

In view of these observations the Court quashed the Accountant General's directive to recover excess payments and re-fix the petitioner's salary. It thus directed the immediate release of the petitioner's full pension and gratuity within two months.

Case Title: Tarlok Chand Vs UT Of J&K

Citation: 2024 LiveLaw (JKL) 355

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