Case Note & Summary
The petitioner, a retired Junior Engineer of Hubli Electricity Supply Company Limited (HESCOM), challenged orders dated 29-07-2021 and 16-10-2017 imposing recovery of Rs. 86,52,163 and denial of complete pension. He had a service of over 30 years and retired on 31-05-2013. The dispute arose from allegations that between 2005-2007, while working as Section Officer at Hidkal, he failed to return 69 failed transformers causing loss of Rs. 20,03,952, and later, a store count revealed shortage of materials valued at Rs. 66,23,333. The employer initiated some recovery actions, including deduction of Rs. 5,000/- from salary in 2008, and in 2012 imposed penalty of recovery of Rs. 20,03,952 with reduction of pay to minimum scale. The appeal against this order modified the penalty to stoppage of one increment. No further departmental inquiry was ever held. After retirement, the respondents withheld full pension, releasing only 25% provisional pension and 50% DCRG, while further recoveries of Rs. 50,30,087 in 2019 and Rs. 86,52,163 in 2021 were directed unilaterally. The petitioner contended that all recoveries were made without following due process, violating principles of natural justice, and that post-retirement, no inquiry was conducted. The respondents admitted that only one minor penalty proceeding was held in 2011, and other recoveries were without inquiry, but argued that when loss is proven, the company is entitled to recover. The court observed that the official memorandums clearly showed no determination of loss was made as no inquiry was conducted. The respondents’ admission that recoveries were made without inquiry was fatal. The court held that recovery and denial of pension without a proper departmental inquiry is arbitrary and illegal. It quashed the impugned orders and directed the release of full pension, DCRG, commutation, and all terminal benefits with all other entitlements.
Headnote
A) Service Law - Pension and Terminal Benefits - Recovery Without Departmental Inquiry - Karnataka Electricity Board Employees’ (Classification, Disciplinary Control & Appeal) Regulations, 1987, Rule 12 - Recovery of Rs. 86,52,163 and withholding of full pension after superannuation without conducting a proper departmental inquiry is arbitrary and contrary to principles of natural justice. The only inquiry held was a minor penalty proceeding which was set aside in appeal, and all subsequent recoveries were unilateral. Held that recovery and denial of pension without inquiry is impermissible; orders quashed and petitioner entitled to full pension and terminal benefits. (Paras 8, 9, 11)
Issue of Consideration
Whether recovery from pension and terminal benefits of a retired employee can be effected without holding a departmental inquiry and in violation of principles of natural justice.
Final Decision
Writ petition allowed. Impugned orders dated 29-07-2021 and 16-10-2017 quashed. Respondents directed to release full pension, DCRG, commutation, and all terminal benefits with all other entitlements.
Law Points
- Recovery from employee salary or pension cannot be effected without holding a proper departmental inquiry
- denial of pension without inquiry violates natural justice
- superannuation does not extinguish right to pension unless proven misconduct in departmental proceedings
- principles of natural justice must be followed before imposing major penalty or recovery
