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Smart Summary

Factual and Procedural Background

Farid Sattar joined the Office of the Accountant General (A&E), West Bengal as an Auditor on 16-2-1982. After cadre bifurcation, he remained in the Accounts Wing and was promoted to Senior Accountant (pay scale Rs 1400-2600) on 4-12-1987. In December 1990 he sought a mutual transfer with a Senior Accountant in Sikkim, but because mutual transfer was impermissible at that level, he opted in July 1992 for a unilateral transfer to the lower post of Accountant (pay scale Rs 1200-2040) in the Office of the Senior Deputy Accountant General (A&E), Sikkim. He accepted written terms and conditions requiring him to:

  • tender a technical resignation from the higher post,
  • rank junior to the juniormost Accountant in the new cadre, and
  • have his pay regulated under the rules applicable to the lower post.

Although he should have entered the lower scale, his pay was erroneously fixed at Rs 1560—the amount he last drew as Senior Accountant. When the error was noticed, a memorandum dated 8-11-1994 ordered refixation and recovery of excess salary. Sattar challenged this action before the Central Administrative Tribunal (CAT), Calcutta, which applied Fundamental Rule (FR) 22(I)(a)(3), quashed the memorandum, and directed pay protection. The Union of India appealed to the Supreme Court.

Legal Issues Presented

  1. Whether the respondent’s pay on transfer to a lower post should be protected under FR 22(I)(a)(3) despite the expressly agreed terms of unilateral transfer.
  2. Whether the CAT erred in treating the unilateral transfer as a transfer “on own request” under FR 15, thereby invoking FR 22(I)(a)(3).
  3. Whether the memorandum dated 8-11-1994 directing refixation of pay and recovery of excess pay was lawful.

Arguments of the Parties

Appellants’ Arguments

  • The CAT wrongly applied FR 22(I)(a)(3); the respondent’s pay had to be fixed strictly in line with the accepted terms of unilateral transfer.
  • Because the respondent resigned the higher post and joined the lower post as a direct recruit, no rule required protection of his earlier pay.

Respondent’s Arguments

  • Unilateral transfer is not contemplated by the Fundamental Rules; therefore, the move must be treated as a transfer on own request under FR 15, attracting FR 22(I)(a)(3).
  • Under that rule, the maximum of the lower scale (Rs 2040) or the pay last drawn (Rs 1560) should be protected, and recovery of alleged excess pay is unwarranted.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Court compared the text and scope of FR 22(I)(a)(2) and FR 22(I)(a)(3):

  • FR 22(I)(a)(2) applies to ordinary transfers to posts of equal responsibility and mandates pay protection;
  • FR 22(I)(a)(3) applies to transfers on own request under FR 15, without involving reversion, and protects pay up to the maximum of the lower scale.

The respondent’s case did not fit either rule because:

  1. The move entailed reversion to a lower post and was governed by explicit terms, not by FR.
  2. Those terms required a technical resignation and fresh appointment as a direct recruit, rendering pay protection inapplicable.
  3. The terms clearly stated that pay would be regulated under the rules for Accountants in the transferee unit; hence fixation had to be in the Rs 1200-2040 scale.

The Court concluded that the CAT erred in importing FR 22(I)(a)(3) and ignoring the binding contractual conditions of transfer. Consequently, the memorandum refixing pay and seeking recovery was legally correct.

Holding and Implications

APPEAL ALLOWED; CAT order set aside.

The Supreme Court upheld the memorandum dated 8-11-1994, confirming refixation of the respondent’s pay in the lower scale and permitting recovery of excess salary. The decision re-affirms that where an employee voluntarily accepts a transfer involving technical resignation and appointment to a lower post, pay protection under FR 22 is inapplicable unless expressly provided. The ruling affects only the parties and does not create new precedent beyond clarifying the limited reach of FR 22 in unilateral transfers.

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    Comptroller & Auditor General Of India And Others v. Farid Sattar .

    V.N Khare, J.— Farid Sattar, the respondent herein, joined as an Auditor in the Office of the Accountant General (A&E), West Bengal on 16-2-1982. Consequent on the bifurcation of Audit and Accounts, the respondent was transferred to the Office of the Accountant General (A&E), West Bengal on 1-11-1985. The respondent opted for the Accounts Wing and as such he was retained there and subsequently promoted to the post of Senior Accountant on 4-12-1987. In December 1990 the respondent while officiating on the post of Senior Accountant applied for mutual transfer with one Shri Paresh Ghosh, Senior Accountant, working in the Office of the Senior Deputy Accountant General (A&E), Sikkim. As mutual transfer was not permissible in the cadre of Senior Accountant, the respondent was advised to apply for unilateral transfer after seeking reversion to the lower post of Accountant as a direct recruit. In pursuance of the advice tendered, the respondent applied for unilateral transfer in the cadre of Accountant foregoing the status of a Senior Accountant, in the Office of the Senior Deputy Accountant General (A&E), Sikkim in July 1992 and he was permitted to take such transfer on certain terms and conditions. The pay scale of Senior Accountant at the relevant time was Rs 1400-2600, whereas, the pay scale of Accountant was Rs 1200-2040. The respondent having accepted the terms and conditions of unilateral transfer was posted as an Accountant in the pay scale of Rs 1200-2040. However, his pay was erroneously fixed at Rs 1560, which he was drawing in the pay scale of Rs 1400-2600 prior to his reversion to the lower post. Subsequently, it was found that the fixation of pay of the respondent at the stage of Rs 1560 was due to some mistake and, therefore, by a memorandum dated 8-11-1994 the pay of the respondent was directed to be refixed and a further direction for recovery of excess payment made to the respondent was also issued. It is at this stage the respondent filed original application before the Central Administrative Tribunal, Calcutta, challenging the memorandum dated 8-11-1994 contending that the pay which he was drawing as Senior Accountant viz., Rs 1560 in the pay scale of Rs 1400-2600 has to be protected even if he was reverted to the lower post of Accountant on transfer and refixation of his pay at a lower stage, and recovery of the alleged excess payment of salary is unwarranted. The appellants herein disputed the contentions of the respondent, inter alia, on the ground that the respondent was bound by the terms and conditions of the unilateral transfer and as on acceptance of such terms and conditions, the respondent was required to tender technical resignation from the post of Senior Accountant and had to join as a direct recruit on the lower post of Accountant ranking juniormost in the cadre of Accountant. It was also contended that on such a transfer the pay of the transferee is not required to be protected and his pay was to be fixed as a direct recruit on the lower post in which post he was reverted. The Tribunal took the view that since unilateral transfer is not contemplated by the Fundamental Rules (hereinafter referred to as “FR”) and as such, in a case like the present one the respondent has to be treated having gone on transfer on request and, therefore, his case was to be governed by FR 22(I)(a)(3). In view of the provisions of above Rules, the Tribunal quashed the impugned order and allowed the application of the respondent. It is against the said judgment and order of the Tribunal the appellants are in appeal before us.

    2. Learned counsel for the appellants urged that the Tribunal fell in error in applying FR 22(I)(a)(3) in the present case. The argument is that the pay of the respondent was required to be fixed in accordance with the terms and conditions which were accepted by the respondent. Learned counsel then referred to the terms and conditions of the unilateral transfer of the respondent. Learned counsel for the respondent urged that unilateral transfer not being contemplated in FR, the transfer of the respondent necessarily has to be governed by FR and in the present case it is FR 22(I)(a)(3) which is applicable, and on an application of the said Rule, the judgment and order of the Tribunal has to be affirmed.

    3. In order to appreciate the arguments of the learned counsel for the parties, it is necessary to refer to FR 22(I)(a)(2) and (3) and the relevant portions are extracted below:

    “22. (I)(a)(2) When the appointment to the new post does not involve such assumption of duties and responsibilities of greater importance, he shall draw as initial pay, the stage of the time-scale which is equal to his pay in respect of the old post held by him on regular basis, or, if there is no such stage, the stage next above his pay in respect of the old post held by him on regular basis:
    (3) When appointment to the new post is made on his own request under sub-rule (a) of Rule 15 of the said rules, and the maximum pay in the time-scale of that post is lower than his pay in respect of the old post held regularly, he shall draw that maximum as his initial pay.”

    4. The relevant terms and conditions of unilateral transfer, as accepted by the respondent, are extracted below:

    “The transfer will be not in public interest and as such he will not be entitled to any joining time, joining time pay or TA.
    He will be assigned junior to the juniormost Accountant on the date he reports for duty in this office for all intents and purposes.
    He shall have to submit his technical resignation from the post of Senior Accountant in the Office of the AG (A&E), West Bengal, Calcutta, in order to join Accountant's post in the Office of the Senior Deputy Accountant General (A&E), Sikkim, Gangtok.
    He shall have no right to seek retransfer to his parent office or to any other office.
    On unilateral transfer he is required to pass whatever departmental examination as prescribed by the relevant recruitment rules.
    His pay shall be regulated in accordance with the relevant rules in force in his UT as Accountant.”

    5. It is no doubt true that unilateral transfer which is said to be coined by the appellants is not contemplated under the Fundamental Rules. What is contemplated is the transfer on written request under Fundamental Rule 15. But if such a transfer is not contemplated under the Fundamental Rule, it is not necessarily to be governed by the Fundamental Rule, but by the terms and conditions of such unilateral transfer. Fundamental Rule 22(I)(a)(2) provides that, when an employee is transferred to a new post, which does not involve assumption of duties and responsibilities of greater importance, he shall draw as initial pay, the stage of the time-scale which is equal to his pay in respect of the old post held by him on regular basis. Thus FR 22(I)(a)(2) would be applicable where there is an ordinary transfer which is not by way of reversion to the lower post and in such a case, the pay of an employee on transfer to a new post has to be protected. Fundamental Rule 22(I)(a)(3) is applicable where an employee is transferred to a new post on his own request under sub-rule (a) of Rule 15, and further in such a transfer no reversion is involved. In such a transfer to a new post if the maximum pay in the time-scale of the transferred post is lower than his pay in respect of the old post held regularly, he is required to draw that maximum as his initial pay. For illustration — an employee working in a pay scale of Rs 1400-2600 was drawing pay at the stage of Rs 2040 and he is transferred on his own request not involving reversion to a post which carries pay scale of Rs 1200-2040, in such a case, the maximum pay which he was drawing viz., Rs 2040 has to be protected on the transferred post which carries a pay scale of Rs 1200-2040. It is not the case here. Here, what we find is that the respondent on his own volition sought transfer on certain terms and conditions accepted by him. The terms and conditions of unilateral transfer are very clear and there is no ambiguity in it. The terms and conditions provided that the respondent on transfer would be appointed to a post which is lower to the post which he was occupying prior to his transfer and he was also required to tender technical resignation from the post which he was holding with a view to join the lower post as a direct recruit and was to rank junior to the juniormost employee in the cadre of Accountant. He was further required to forego any benefit of passing any departmental examination while working in the higher post. In such a situation, the pay of the respondent had to be fixed with reference to the lower pay scale and not with reference to the pay drawn by him in the higher post since he was to be considered as a direct recruit in the lower post.

    6. Under the terms and conditions of the transfer, the pay which the respondent was drawing on the higher post was not required to be protected when he joined the lower post of Accountant.

    7. For the foregoing reasons, we are of the view that the pay of the respondent, as fixed earlier, was correctly refixed by memorandum dated 8-11-1994. We, therefore, find that the judgment and order of the Tribunal is not sustainable in law and the same deserves to be set aside. We order accordingly. The appeal is allowed. There shall be no order as to costs.

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    Comptroller & Auditor General Of India And Others v. Farid Sattar .
    (Apr 7, 2000)