Smt. Normi Topno v. State Of Jharkhand And Ors.

The judgment of the court was delivered by

M. Karpaga Vinayagam, C.J:— Smt. Normi Topno, on being aggrieved by the Order of the learned Single Judge, upholding the action of recovery of the excess payment from her pension and gratuity, has filed this letters patent appeal.

2. The Appellant got retired from service on 30th September, 1999 as A.N.M from Primary Health Centre, Boarijor, Godda. Thereupon her pension papers were sent to the Accountant General. On scrutiny, the Accountant General found that she was wrongly granted Time Bound Promotion. Therefore, the Accountant General returned the papers for clarification. The Department scrutinized the papers and found that the Appellant was wrongly given Time Bound Promotion. Therefore, pension papers were forwarded to the Accountant General for recovery of Rs. 50,456, the excess amount paid to her from her pension/Gratuity. Challenging the said action of the Authorities, Smt. Normi Topno filed a Writ Petition in W.P(S) No. 2668 of 2003 before the learned Single Judge. The same was dismissed on 25th January, 2006 holding that the action of recovery is justified in view of the Division Bench Judgment in State of Jharkhand v. (Smt.) Girish Kumari Prasad [2004 (2) JCR 524 (Jhr)] and Ram Chandra Singh v. State of Jharkhand [2005 (2) JLJR 705],

3. Challenging the same, the Appellant has filed this present appeal. When the matter came up before the Division Bench, the Division Bench felt that the core question, which has to be answered in this case, has to be dealt with by the Larger Bench since the said question has not been discussed and decided in Division Bench Judgments in (Smt.) Girish Kumari Prasad's Case [2004 (2) JCR 524 (Jhr) and Ram Chandra Singh's case [2005 (2) JLJR 705], relied upon by the learned Single Judge, and therefore, referred the matter for hearing by Larger Bench of three Judges with the following question framed by the learned Division Bench.

4. Whether, without cancelling the Order of promotion by any competent Authority and merely on the recommendation of audit objection, the Order of promotion can be treated to be illegal and thereby pension and other retrial benefits can be reduced?

5. On the basis of the above question framed by the Division Bench, the matter has been referred to this Full Bench.

6. The short facts, which are required for disposal of this appeal are as follows:

(i) Smt. Normi Topno was appointed as a Trained Dai in the Health Department in the year 1967.

(ii) She was promoted to A.N.M by the Director of Health Services by the Order dated 24th April, 1980.

(iii) Thereupon she joined as A.N.M on 06th May, 1980.

(iv) She was given Time Bound Promotion on 15th February, 1990 with effect from 16th April, 1981.

(v) The Second Time Bound Promotion was given to her on 16th April, 1994.

(vi) On 30th September, 1999 she was superannuated as A.N.M from Primary Health Centre, Boarijor, Godda.

(vii) After retirement, her pension papers were sent to the Accountant General on 09th February, 2001.

(viii) Since her retiral benefits were not given in time, she moved the High Court and in pursuance of the Order, she got the benefit in August 2003.

(ix) In the meantime, the pension papers were sent to the Accountant General on 09th February, 2001.

(x) On 18th March, 2001, the papers were returned by the Accountant General seeking for a clarification, since according to the Accountant General Petitioner was wrongly granted Time Bound Promotion as she was initially appointed as Trained Dai.

(xi) When the Department scrutinized the papers, it found that the Appellant was wrongly given First Time Bound Promotion on 15th February, 1990 with effect from 16th April, 1981 and again on 15th February, 1996 she was given Second Time Bound Promotion with effect from 16th April, 1994. Therefore, the Respondent-Authorities passed an Order dated 13th March, 2007 for recovery of Rs. 50,456 from her pension and gratuity which was said to be paid in excess.

(xii) Challenging the said action of the Respondents, Writ Petition in W.P(S) No. 2668 of 2003 was filed and the same was dismissed by the Single Judge holding that the Order of recovery from the Pension and Gratuity is perfectly valid on the strength of the decision in State of Jharkhand v. Smt. Girish Kumari Prasad reported in 2004 (2) JCR 524 (Jhr.) and Ram Chandra Singh v. State of Jharkhand reported in 2005 (2) JLJR 705. Hence this appeal.

7. Dr. S.N Pathak, learned Counsel appearing for the Appellant would make the following submission in Order to substantiate his plea that the Order of learned Single Judge as well as the Order of recovery from the Pension and Gratuity are wrong. The following is the gist:

(i) The learned Single Judge is wrong in holding that the Order of recovery is fully justified and relying upon Ram Chandra Singh's case and Girish Kumari Prasad's case in which the question posed in this case has not been discussed and decided;

(ii) As laid down by the Supreme Court in Sahib Ram v. State of Haryana [1995 Supp (1) SCC 18], unless there is mis-representation on the part of the Appellant in grant of First and Second Time Bound Promotion, no recovery can be made from her retirement benefit. In this case there is no allegation about mis-representation by the Appellant. The learned Single Judge has not referred to and relied upon this Judgment;

(iii) The Order of recovery without issuing any show cause notice in complete violation of natural justice and without following any procedure under Rule 43(b) would suffer from infirmity;

(iv) There is no provision to recover the excess amount paid from Pension or Gratuity after retirement on the ground that the Time Bound Promotion is wrong without cancelling the said promotion as held by the Supreme Court in Bihar State Electricity Board v. Bijay Bhadur [(2000) 10 SCC 99]

8. The learned Counsel for the Appellant would cite the following Authorities in support of his points:

(i) 1995 Supp (1) SCC 18 [Sahib Ram v. State of Haryana]

(ii) (2000) 10 SCC 99 [Bihar State Electricity Board v. Bijay Bhadur]

(iii) 2006 (4) JLJR [State of Jharkhand v. Baleshwar Singh]

(iv) 2006 (4) JLJR 559 [Nand Kishore Pandey v. Jharkhand State Electricity Board]

(v) 2006 (4) JLJR 264 [Nandipati Das v. Bihar State Electricity Board]

9. The reply by Mr. Sumeet Gadodia, the Counsel for the State Government is as follows:

(i) The grant of First Time Bound Promotion with effect from 16th April, 1981 and Second Time Bound Promotion with effect from 15th June, 1994 is wrong as the Appellant was originally appointed as Trained Dai;

(ii) As the Appellant has not disputed the objection of the Accountant General, the admitted case is that the Time Bound Promotion was illegal and the natural consequences would be to recover the excess amount.

(iii) It is true that the Supreme Court in Sahib Ram v. State of Haryana [1995 Supp (1) SCC 18] observed that though excess payment was wrongly made to the employee, it was not on account of any mis-representation by the said employee, but by wrong construction made by the Principal, and for this, the employee cannot be held responsible and as such the amount paid till date cannot be recovered from the employee. But, aforesaid observation of the Supreme Court in the above case is confined to the facts of the said case and cannot be applied as universal.

(iv) It is settled law that any benefit given to a person by mistake is recoverable, when the mistake is detected and such wrong benefit given to a person by mistake cannot confer any right on the recipient or act as an estoppel against the person, who by mistake has granted such wrong benefit. Section 72 of the Indian Contract Act provides that when a person to whom money has been paid by mistake must repay/return it. The said principle of Section 72 of the Indian Contract Act will also apply to this case. This point has already been decided in Patna Full Bench Judgment reported in 2007 (3) PLJR 398 [Ram Binod Singh v. Bihar State Electricity Board] and therefore, the Order of Single Judge is perfectly justified.

(v) He cited the following decisions:

(a) 2007 (1) JCR 22 (SC) [Purshottam Lal Das v. The State of Bihar]

(b) 2007 (3) PLJR 398 [Ram Binod Singh v. Bihar State Electricity Board (F.B)]

(c) 2004 (2) JCR 524 (Jhr) [The State of Jharkhand v. Smt Girish Kumari Prasad]

(d) 2005 (2) JLJR 705 [Ram Chandra Singh v. The State of Jharkhand]

(e) 2005 (2) JCR 198 (Jhr) [Rameshwar Prasad v. Jharkhand State Electricity Board]

(f) (2001) 4 SCC 309 [Union of India v. Rakesh Kumar]

(g) (1997) 6 SCC 139 : AIR 1997 SC 2776 [V. Gangaram v. Regional Joint Director]

(h) (1998) 9 SCC 595 [The State of Punjab v. Devinder Singh]

(i) (2000) 9 SCC 187 [Union of India v. Sujata Vedachalam (Smt.)]

(j) (2007) 3 SCC 580 [Vividh Marbles Pvt. Ltd. v. The Commercial Taxes]

10. We have carefully considered the submissions made by the Counsel for the parties.

11. The main contention urged by the Counsel for the Appellant is that the Order impugned passed by the learned Single Judge is wrong as the principles laid down by the Supreme Court in Sahib Ram's case and Bijay Bhadur's case have not been followed and on the other hand, the Judgment in Girish Kumari Prasad's case and Ram Chandra Singh's case rendered by the Division Benches of this High Court have been relied upon even though this question has not been discussed and decided.

12. Let us now refer to the relevant observations made by the Supreme Court in Sahib Ram's case and Bijay Bhadur's case:

(i) Sahib Ram v. State of Haryana [1995 Supp (1) SCC 18] Admittedly the Appellant does not possess the required educational qualifications. Linder the circumstances the Appellant would not be entitled to the relaxation. The Principal erred in granted him the relaxation. Since the date of relaxation the Appellant had been paid his salary on the revised scale. However, it is not on account of any misrepresentation made by the Appellant that the benefit of the higher pay scale was given to him but by wrong construction made by the Principal for which the Appellant cannot be held to be at fault. Under the circumstances, the amount paid till date may not be recovered from the Appellant.

(ii) Bihar State Electricity Board v. Bijay Bhadur, (2000) 10 SCC 99] …We, however, are not in a position to lend any credence to the same by reason of the fact that while the increments granted have been sought to be recovered but promotions given have not been withdrawn or cancelled, the Board being the governmental agency and fairness being the only accepted methodology cannot maintain a dual standard on the basis of the selfsame Regulation….[para 7]

…We do record our concurrence with the observations of this Court in Sahib Ram case and come to a conclusion that since payments have been mode without any representation or a misrepresentation, the Appellant Board could not possibly be granted any liberty to deduct or recover the excess amount paid by way of increments at an earlier point of time. The act or acts on the part of the Appellant Board cannot under any circumstances be said to be in consonance with equity, good conscience and justice. The concept of fairness has been given a go-by.

As such the actions initiated for recovery cannot be sustained under any circumstances….[para 10]

13. The above observations would make it clear the following two aspects:

(i) Unless it is established that excess amount was received by the employee either on mis-representation or fraud or negligence, the amount paid cannot be recovered from the employee, that too from the pension and gratuity even without any opportunity of being heard causing serious prejudice to the person.

(ii) Unless there is an inquiry with reference to the question whether the time bound promotion has been wrongly given and unless the Order giving such promotion is cancelled on that reason, the consequent recovery cannot be made.

14. The above mandates which are in the nature of ratio have been followed by the Division Bench of this Court in Nand Kishore Pandey v. Jharkhand State Electricity Board [2006 (4) JLJR 558] and The State of Jharkhand v. Baleshwar Singh [2006 (4) JLJR 259], It is also reaffirmed in Ram Prasann Singh v. State of Jharkhand [2005 (4) JCR 48 (Jhr)].

15. The learned Single Judge, admittedly, did not refer to the above decisions and on the other hand, he relied upon Girish Kumari Prasad's Case and Ram Chandra Singh's case, and dismissed the Writ Petition, justifying the action of recovery from the Pension and Gratuity of the Appellant.

16. As indicated above, the case on hand has been referred to the decision of this Larger Bench by the Division Bench, mainly on the reason that the decision of the Division Bench in Girish Kumari Prasad case [2004 (2) JCR 524 (Jhr.) and Ram Chandra Singh's case [2005 (2) JLJR 705] relied upon by the learned Single Juage have not dealt with the question posed in this case and as such those decisions require the reconsideration. The relevant observation of the Division Bench in the Order dated 22nd June, 2006 is as follows:

3. 22nd June, 2006 In this case, one of the questions requires to be determined is whether, without canceling the Order of promotion by any competent Authority and merely on the recommendation of audit objection, the Order of promotion can be treated to be illegal and thereby pension and other retiral benefits can be reduced.

We feel that the aforesaid issue has not been discussed and decided by the Division bench in the case of State of Jharkhand v. Smt. Girish Kumari Prasad Reported in 2004 (2) JCR 524 (Jhr.), nor in the case of Ram Chandra Singh v. State of Jharkhand Reported in 2005 (2) JLJR 705.

We accordingly, refer the matter for hearing by a larger Bench of three Judges. Let this case be listed before an appropriate larger Bench.

The Appellant is directed to file two more sets of paper books within a fortnight.

17. At this stage, we have to make it clear two aspects. They are as follows:

(i) As referred by the Division bench, the question for consideration in this case has not been discussed and decided in Girish Kumari Prasad's Case nor in Ram Chandra Singh's case. Therefore, the findings given in these decisions would apply to facts of those cases only and cannot be accepted as ratio. Further, in those Judgments, the existence of the power of the Government to recover the excess payment from, pension alone is mentioned. It is not mentioned as to how the said power could be exercised and when it can be exercised and by whom it could be exercised. Even then, the learned Single Judge relied upon those decisions to dismiss the Writ Petition.

(ii) Secondly, the learned Single Judge did not refer to and rely upon Sahib Ram's Case and Bijay Bhadur's case decided by the Supreme Court, which provides the answer to the question posed in this case.

18. As indicated above, in Sahib Ram's case the Supreme Court specifically held that the benefit of higher pay scale given to employee without any mis-representation on his part cannot be recovered from his Pension or Gratuity.

19. As referred to above, in Bihar State Electricity Board v. Bijay Bhadur [(2000) 10 SCC 99], the Supreme Court, while concurring with the decision in Sahib Ram's case came to the categorical conclusion that the increments given on the basis of the promotions wrongly given cannot be recovered, without cancelling the promotion. It further held that when there was no mis-representation on the part of the employee, the action for recovery from pension cannot be said to be in consonance with the equity, good conscience and justice.

20. Relying upon the ratio of Sahib Ram's case and Bijay Bhadur's case, this Court through the various Division Benches and Single Benches on various decisions held that it was totally unfair on the part of the Board to recover the increment amount without invoking the proceedings under Section 43(b) and without giving opportunity to the retired employee.

21. The extracts of those decisions, which followed the decisions of the, Supreme Court in Sahib Ram's case and Bijay Bhadur's case are quoted below:

(i) In Nakul Raut v. State of Jharkhand [2002 (1) JLJR 597] the Single Judge, while dealing with the said question, has given the following answer:

… After retirement and more than three years from the date of promotion, now it is not open to the Respondents to raise the question of legality and propriety of promotion as was granted in favour of Petitioner while he was in service…. [para 6]

… the Respondents cannot re-open the issue relating to legality and propriety of Order of promotion to selection grade as was allowed to Petitioner while he was in service at this belated stage, nor can recover any amount, there being no proceeding under Rule 43(b) of the Bihar Pension Rules having initiated. [para 7]

(ii) In Ram Prasann Singh v. State of Jharkhand [2005 (4) JCR 48 (Jhr)] the Single Judge has given the following observations:

… It is now well-settled that any Order causing prejudice to a person cannot be passed without giving him an opportunity of hearing. The impugned Orders having been issued violating the principles of natural justice are thus, null and void. The Order of recovery, as contained in Annexure-3, is also in the teeth of the decision of the Supreme Court in Sahib Ram (supra) 2004 (2) JCR 524 (Jhr) and is not sustainable also on - that count. Since the instant case is not a case of an inadvertence or mistake in giving promotion, the Orders were issued by the competent Authorities on the basis of the departmental decision, and the scales were fixed after the respective promotions by the competent Authority, and payments of the salary wore made on the promoted scales for years till the retirement of the Petitioner, the Respondents cannot now shift the dates of promotion according to their own volition without giving any notice and opportunity of hearing to the Petitioner. It is not a case of admitted mistake/position and as such the decision of the Division Bench in the State of Jharkhand v. Smt. Girish Kumari Prasad (supra) has absolutely no application in the facts and circumstances of the instant case… [para 7]

(iii) In Md. Usman v. State of Jharkhand [2006 (4) JCR 147 (Jhr)], the Single Judge of this Court given the following observation:

… After a period of 20 years, he cannot be deprived of all these benefits in absence of any mis-representation or fraud attributable to him. This case is squarely covered by the Judgment of the Apex Court in the Sahib Ram's Case (Supra)…admittedly a great prejudice has been caused to the Petitioner by the Order impugned, which has otherwise been passed without affording any opportunity of being heard to him….[para 6]

(iv) The Division Bench of this Court in State of Jharkhand v. Baleshwar Singh [2006 (4) JLJR 259] observed as follows:

Now the next questions arises as to how such recovery can be made from the retiral benefits; who can recover the amount through which procedure recovery can be made and the limitation, if any, to recover such amount. [para 9]

This issue has not been determined either by this Court in the case of Smt. Girish Kumari Prasad (supra) nor by the Supreme Court in the case of Union of India v. Rakesh Kumar (supra) or the cases, as referred by the parties. [para 10]

… The State, can recover the amount by way of filing a suit before a Civil Court of competent jurisdiction or in appropriate case, may file certificate case but in both cases, law of limitation being applicable, it is not open to the State to recover any amount at anytime from pension or gratuity in the name of adjustment, that too without giving opportunity to the retired employee. Before recovery or adjustment of any amount from the pension or gratuity in the case of mistaken calculation or payment in excess, the retired employee should be given an opportunity of hearing to state as to why the amount be not recovered/adjusted from his pension/gratuity and it will be open to the retired employee to show that such recovery or adjustment is uncalled for or is barred by limitation…. [para 13]

… if a person by mis-representation or duping the State Government draws excess amount of salary or Order benefit, such action being misconduct, after retirement it can be recovered only under Rule 43(b) of the Bihar Pension Rules 1950. If charge is not framed while employee is in service, after retirement it is only the State Government, empowered to do so and not any other officer and there is a limitation of four years, prescribed under the Rule…. [para 15]

In these type of cases when excess payment is made to a Government employee by mistake and such mistake is committed by some other person, one cannot ignore Rule 43(b) in such cases. It is not that only in the case of misconduct Rule 43(b) can be invoked but it can also be invoked against an employee, if there is a pecuniary loss, caused to the Government due to negligence of the employee. That means the employee due to whose negligence such amount was paid to another employee and such negligence caused pecuniary loss to the State Government, then why the State Government will not recover the amount by invoking the provisions of Rule 43(b) against the person, due to whose negligence pecuniary loss was caused to the State Government..[para 16]

(v) In Nandipaii Das v. Bihar State Electricity Board [2006 (4) JLJR 264] the Division Bench of this Court would give the following observations:

Apart from the aforesaid facts, the Respondents have not made it clear as to how any amount can be reconverted from the D.C.R Gratuity of the Petitioner, without following the prescribed procedure. It is informed that the Bihar Pension Rules, 1950 is applicable for the Jharkhand State Electricity Board's employees. Under Rule 43(b) of the Bihar Pension Rules, 1950, no amount can be recovered or deducted from the pension, which includes gratuity, without a proceeding and that too can be done, if there is a misconduct on the part of the employee or if there is a loss of the exchequer of the Board, due to misconduct or negligence of the employee. In the present case, neither the procedure, prescribed under Rule 43(b) was followed nor the Respondents could lay hands on any documents to suggest that there was a misconduct on the part of the Petitioner or there is a loss of exchequer of the Board due to the misconduct or negligence of the Petitioner. [para 9]

(vi) The Division Bench of this Court in Nand Kishore Pandey v. Jharkhand State Electricity Board [2006 (4) JLJR 558] would observe as follows:

In our view, therefore, the principle laid down by the Supreme Court in Bijay Bahadur's case (supra) shall apply in the present case. Consequently, it would be totally unfair on the part of the Board if any increment paid before 1994 is directed to be recovered from the Petitioners, [para 11]

22. Let us see now the relevant observations of the Girish Kumari Prasad's case and Ram Chandra Singh's case.

Girish Kumari's Case [2004 (2) JCR 524 (Jhr)

Sahib Ram's Case would not apply to this case. In this case the first time bound promotion was given to the writ Petitioner on 15th March, 1982 after rectifying the date which was earlier assigned as 10th April, 1981. This means that her service would be deemed to have commenced from 14th March, 1972. There is no objection raised by her at that time. But when the matter finally reaches the Accountant General and it is found that some one had been given some thing that is not due, either because of negligence, collusion or fraud, it is the duty of the Accountant General being the guardian of the finances of the State, to rectify the mistake committed either by omission or by commission by some one in the department. There cannot be any estoppel against seeking to recover an unauthorized, payment made to an undeserving person. The fact that, some one had made an error in giving a time bound promotion to the writ Petitioner when it was not due, could not clothe her with any special right.

Ram Chandra Singh's case [2005 (2) JLJR 705]

The benefit of the recommendation of the 5th Pay Revision Committee was not denied to the Appellants, in any manner. Such error committed in pay fixation was rightly corrected and the direction is for recovery of excess amount on account of the aforesaid mistake was also rightly given.

23. As indicated above, in Girish Kumar's Prasad's case the Division Bench or this Court has held that something that is not due was given either because of negligence, collusion or fraud, the said mistake committed either by commission or omission by some one in the department can be rectified and as such there cannot be any estoppel to seek recovery of an unauthorized payment made to an undeserving person. There is no quarrel over this proposition. However, in the said case it has not been held that any such amount can be recovered after his retirement from the pensionary benefits of the employee straightaway without following the procedure under Rule 43(b) of the Bihar Pension Rules or without following the procedure established by law for holding guilty of negligence, collusion or fraud or without holding any person responsible and liable for such mistake, negligence or fraud. Similarly, the Ram Chandra Singh's case also did not hold like that. Both these decisions, merely, held about the existence of the power of the State to recover and not the manner or procedure for such recovery.

24. On the other hand, on the basis of the ratio decided by the Supreme Court in Sahib Ram's Case and Bijay Bhadur's Case, Division Bench of this Court in Baleshwar Singh's case [2006 (4) JLJR 259] has specifically framed this question posed before this Court and gave an answer to the effect that since the specific powers for recovery has been conferred to the Government under Rule 43(b) of the Bihar Pension Rules, without following the procedure contemplated under the said Rule and without giving opportunity to the retired employee with reference to the various conditions contemplated in the said Rule, the Department cannot be allowed to recover any amount and the same can be done only in a manner which has been prescribed under Rule 43(b) of the Bihar Pension Rules, that too by the competent Authority.

25. Therefore, it is clear that the answer to the question framed in this case lies in the interpretation of the Rule 43(b) of the Bihar Pension Rules.

26. Let us now endeavour to interpret Rule 43(b) in Order to decide the question posed in this case on the basis of first principle of law.

27. As indicated above, Rule 43(b) confers the power and prescribes procedure for recovery of the amount from the pension and Gratuity. As per this rule, the State Government has jurisdiction to recover its clues from the Pension and Gratuity of a retired employee only under certain conditions as contemplated under Section 43(b). Let us quote the provision:

43(a) xxx xxx xxx

(b) The State Government further reserve to themselves the right of withholding or withdrawing a pension or any part of it, whether permanently or for a specified period, and the right of Ordering the recovery from pension of the whole or part of any pecuniary loss caused to Government if the pensioner is found in departmental or judicial proceeding to have been guilty of grave misconduct; or to have caused pecuniary loss to Government by misconduct or negligence, during his service including service rendered on re-employment after retirement:

Provided that -

(a) such departmental proceedings, if not instituted while the Government servant was on duty either before retirement or during re-employment;

(i) shall not be instituted save with the sanction of the State Government;

(ii) shall be in respect of an event while took place not more than four years before the institution of such proceedings; and

(iii) shall be conducted by such Authority and at such place or places as the State Government may direct and in accordance with the procedure applicable to proceedings on which an Order of dismissal from service may be made;

(b) judicial proceedings, if not instituted while the Government servant was on duty either before retirement or during re-employment, shall have been instituted in accordance with Sub-clause (ii) of Clause (a); and

(c) the Bihar Public Service Commission, shall be consulted before final Orders are passed.

Explanation. - For the purposes of the rule-

(a) departmental proceeding shall be deemed to have been instituted when the charges framed, against the pensioner an issued to him or, if the Government servant has been placed under suspension from an earlier date, on such data; and

(b) judicial proceedings shall be deemed to have been instituted:

(i) in the case of criminal proceedings, on the date on which a complaint is made or a charge-sheet is submitted, to a Criminal Court; and

(ii) in the case of civil proceedings, on the date on which the complaint is presented or as the case may be, an application is made to a Civil Court

28. The above provision would provide for compliance of the following conditions before proceeding to recovery of Pension and Gratuity.

(i) The State Government has got a right of withholding or withdrawing the pension and has got the right of recovery from the pension when there is any pecuniary loss caused to the Government. But, before the recovery, pensioner shall be found to have been guilty of a grave misconduct either in a departmental proceeding or judicial proceeding;

(ii) After retirement, the departmental proceeding can be instituted against a pensioner only with the sanction of the Government. Even that institution can be made only in respect of an event which took place within four years from the date of the institution. If judicial proceeding not instituted when the Government servant was in service, the institution must have been instituted within four years by filing a chargesheet. In the case of civil proceedings the application shall be filed within a specified period to the Civil Court.

29. The above provision would clearly indicate that the State can recover only when these conditions have been fulfilled either by initiating Civil Court proceedings or by initiating certificate proceeding. In both the cases law of limitation is applicable. Therefore, it is not open to the State to withhold or recover any amount at any time from Pension or Gratuity, after retirement, in the name of the adjustment straightaway without fulfilling the conditions contained in the rule.

30. The said provision would categorically indicate that without giving opportunity to the retired employee, recovery or adjustment cannot be made. Before recovery or adjustment of any amount from the pension or gratuity, the retired employee should be given opportunity of hearing to state as to why the amount be not recovered or adjusted from his pension and gratuity and it will be open to the retired employee to show that such recovery or adjustment is uncalled for or barred by limitation.

31. If a departmental proceeding is not initiated by a competent Authority while the Government employee was in service; after retirement, it is only the State Government which is empowered to initiate such proceeding under Rule 43(b) subject to the limitation of four years from the date of occurrence.

32. If the power is vested with the State Government to make recovery under Rule 43(b), no such recovery or adjustment can be made by any other Authority and that too without following the procedure specifically mentioned under Rule 43(b) of the Bihar Pension Rules. When a particular procedure is contemplated for doing a particular thing under particular provision of law, the State cannot be permitted to say that it has got an inherent power to do the particular thing even without following the procedure.

33. Admittedly no excess amount was received by the Appellant either on her misrepresentation or fraud or negligence. If opportunity had been given to the Appellant, after retirement, she would have established her defence whereby the State Authorities would have been convinced that it is not a case of recovery.

34. After retirement, there is no relationship of employer and employee. As such, recovery out of retiral dues can be made only under the provisions of law, i.e, under Rule 43(b) of the Bihar Pension Ruses. If this is followed then naturally the department has to obtain sanction from the State Government to initiate proceeding within four years as contemplated under Rule 43(b).

35. In view of Rule 43(b) no amount can be recovered from the pension except in accordance with the procedure prescribed thereunder. Only in the departmental proceeding or judicial proceeding when the pensioner is found guilty of misconduct and causing pecuniary loss to the Government by such misconduct then only it can be recovered.

36. If a departmental proceeding is not initiated by the competent Authority while the Government employee was in service, then the department has to initiate proceeding for recovery after retirement only through the State Government which is empowered to do so under Rule 43(b) subject to limitation of four years.

37. If the said power is vested with the State Government for recovery of the excess amount from the pension amount then it is the State Government alone, who has to initiate proceeding which is subject to the prescribed period of limitation.

38. Admittedly, in this case, as indicated above, alleged excess amount was paid to the Appellant not due to the Appellant's mis-representation, fraud or misconduct.

39. In the absence of any inquiry with reference to the part played by the Appellant or any other employee involving himself in the mistake, misconduct, fraud or mis-representation, the Department cannot pass an Order for recovery from the Pension and Gratuity of the employee after retirement.

40. From the facts appearing on record, it is evident that there is no allegation of any mis-representation or misconduct by the Appellant at any stage when the time bound promotion was given; the Orders of time bound promotions were issued long back in the year 1990 and 1996; thereafter, the pay scales were fixed by the Authorities concerned and the Appellant got her salary on the basis of the said Orders of the competent Authorities; She also discharged duties of the promoted offices; no dispute was ever raised regarding her promotion or pay scale during her service period and after her retirement to the prejudice of the Appellant, now the Orders of recovery of alleged excess payment has been issued on the basis that time bound promotion was given wrongly.

41. It is not known as to how the conclusion with regard to the alleged wrong payment was given without any inquiry whatsoever. It cannot be debated that the said conclusion would definitely cause prejudice to the employee who got retired long back.

42. It is now well-settled that any Order causing prejudice to a person cannot be passed without giving him/her an opportunity of hearing. The impugned Order, having been issued, violating the principles of natural justice would, thus, become null and void.

43. It is no doubt true, the Supreme Court held that when the promotion is ab-initio void, then on that basis, recovery can be made. It is also true that the power is vested with the State to recover the excess payment which was given wrongly or by mistake. But, where the promotion is said to be ab-initio void or the excess payment was said to be made on the basis of wrong calculation or due to the mistake committed in the department, then, it has to be found out as to how the promotion could be held to be ab-initio void and how there was miscalculation or mistake and if it is so, by whom it was committed and all these things have to be verified only through the inquiry by giving proper opportunity to the person concerned, who is likely to be affected by the conclusion of the inquiry. The conclusion without any inquiry or finding that there is a pecuniary loss to the Government due to the misconduct or mistake of pensioner even without giving opportunity to the person concerned, would certainly cause prejudice to the said person.

44. It is not a case of admitted mistake/position and as such the decision of Girish Kumari Prasad's case and Ram Chandra Singh's case have absolutely no application to the facts and circumstances of the instant case.

45. The Counsel for the Respondents placed heavy reliance on the Full Bench Judgment of Patna High Court in Ram Binod Singh v. Bihar State Electricity Board [2007 (3) PLJR 398] in Order to show the existence of the powers under Section 72 of the Contract Act, to recover the excess payment after retirement either on mistake of law or on mistake of fact.

46. We are unable to accept the contention of the Counsel for the Respondents and also the conclusion arrived at by the Full Bench of the Patna High Court in view of the fact that Rule 43(b) of the Bihar Pension Rules have not been dealt with in the light of the ratio decided by the Supreme Court in Sahib Ram's Case and Bijay Bhadur's case.

47. When the specific powers have been given to the competent Authority to recover the pension under certain conditions through Rule 43(b) of the Bihar Pension Rules, the said recovery can be done only under the said specific provision by following the conditions contemplated under the same and no other provision can be invoked in the garb of inherent powers. Therefore, decision of the Patna High Court Full Bench would not be of any use.

48. In view of the above discussions, we arrive at the following conclusion. To sum up:

After retirement, there is no relationship of employer and employee and as such no recovery can be made from the retrial benefits without following procedure of law as provided under Rule 43(b) of the Bihar Pension Rules. Hence, without fulfilling the conditions under Rule 43(b) and without cancelling the Order of promotion after enquiry by the competent Authority, pension and other retiral benefits cannot be recovered that too without giving opportunity to the retired employee and without giving any finding with reference to the mis-representation or misconduct on the part of the concerned employee or any other employee merely on the recommendation of audit objection.

49. In view of the above, the Order of recovery and Order of the learned Single Judge are quashed and set aside. This reference is answered, accordingly.