A) Abstract / Headnote

This case addresses the legality of pay scale reduction and recovery of excess payments made post-retirement under service law. The Supreme Court reviewed the implications of the Government Resolution dated 8th February 1999, which set parameters for promotions and pay scales. The appellant was promoted to a higher post before 31st December 1995 and contended the retrospective reduction of his pay violated principles of natural justice. The Court found the State’s actions arbitrary and held the recovery after retirement impermissible, aligning with equity principles in service jurisprudence.

Keywords: Service Law, Pay Scale Reduction, Time-Bound Promotion, Natural Justice, Retrospective Recovery.

B) Case Details

• i) Judgment Cause Title: Jagdish Prasad Singh v. State of Bihar and Others
• ii) Case Number: Civil Appeal No. 1635 of 2013
• iii) Judgment Date: 8th August 2024
• iv) Court: Supreme Court of India
• v) Quorum: Sandeep Mehta and R. Mahadevan, JJ.
• vi) Author: Mehta, J.
• vii) Citation: [2024] 8 S.C.R. 377
• viii) Legal Provisions Involved: Articles 14 and 16 of the Constitution of India; Bihar Pension Rules, 1950; Resolution dated 8th February 1999.
• ix) Judgments Overruled: None specified.
• x) Case Related to Law Subjects: Service Law, Constitutional Law.

C) Introduction and Background of Judgment

The appellant, a retired Senior Selection Grade Marketing Officer-cum-Assistant District Supply Officer, faced a reduction in pension and retrospective recovery of excess payments based on alleged misapplication of the pay rules. The case revolves around the interpretation of a Government Resolution protecting pre-1995 promotions from adverse retrospective impacts.

D) Facts of the Case

1. The appellant joined as a Supply Inspector in Bihar in 1966 and was promoted over his career, receiving a time-bound promotion in 1991.
2. A 1999 Government Resolution revised pay scales and ceased certain promotional benefits post-1996, which later became contentious.
3. Eight years after retirement in 2001, a recovery notice citing excess payment due to pay fixation errors was issued in 2009.
4. Despite several representations and legal appeals, the High Court upheld the State’s recovery actions.
5. This led to the present appeal in the Supreme Court.

E) Legal Issues Raised

• i) Whether the Government Resolution dated 8th February 1999 allows retrospective pay scale reduction for promotions made before 31st December 1995.
• ii) Whether post-retirement recovery of excess pay violates principles of natural justice.
• iii) Whether such recovery aligns with Articles 14 and 16 of the Constitution of India.

F) Petitioner/Appellant’s Arguments

1. The appellant argued his promotion in 1991, prior to the 1995 cut-off, was protected under the Government Resolution.
2. He contended the reduction in pay and pension violated natural justice as it was executed without notice or inquiry.
3. He claimed retrospective application of the resolution caused undue hardship, contravening equitable principles.

G) Respondent’s Arguments

1. The State justified the recovery as a uniform application of the 1999 Resolution.
2. They maintained the appellant’s pay scale was erroneously fixed, leading to overpayment that needed correction.
3. The respondents argued that the action was consistent with administrative policies and upheld by lower courts.

H) Judgment

a. Ratio Decidendi

The Court ruled that the appellant’s promotion before the stipulated date entitled him to protection under the resolution. Retrospective recovery post-retirement violated principles of equity and natural justice.

b. Obiter Dicta

The Court emphasized the inequity of recovering amounts from retired employees long after the alleged error, especially without their fault.

c. Guidelines Issued

1. Retrospective recovery post-retirement, especially after eight years, is impermissible unless fraud is proven.
2. Recovery actions must follow procedural fairness, including inquiry and notice.
3. Promotions made before protective cut-off dates must not be adversely affected by subsequent resolutions.

I) Conclusion and Comments

This judgment reinforces employee rights against arbitrary recovery and retrospective policy applications. It aligns with principles of natural justice and equitable discretion in service law, providing crucial precedents for public servants.

J) References

a. Important Cases Referred

1. Syed Abdul Qadir v. State of Bihar, [2008] 17 SCR 917.
2. ITC Limited v. State of Uttar Pradesh, [2011] 7 SCR 66.
3. State of Punjab v. Rafiq Masih (White Washer), [2014] 13 SCR 1343.
4. Thomas Daniel v. State of Kerala, [2022] 4 SCR 606.

b. Important Statutes Referred

1. Articles 14 and 16, Constitution of India.
2. Bihar Pension Rules, 1950.