Supreme Court clarifies pay scale entitlement for Junior Clerks: Maruti Tukaram Bagawe vs. State of Maharashtra (27 February 2020)

Introduction

Date of the Judgment: 27 February 2020
Citation: [Not Available in Source]
Judges: Ashok Bhushan, J. and Mohan M. Shantanagoudar, J.

Can a government employee be asked to return a salary they received due to a government order, which was later withdrawn? The Supreme Court of India recently addressed this question in a case involving Junior Clerks in Maharashtra, who were granted a higher pay scale, which was later revoked. This case clarifies the entitlement of Junior Clerks to higher pay scales and the conditions under which the government can recover excess payments.

The Supreme Court bench, comprising Justices Ashok Bhushan and Mohan M. Shantanagoudar, delivered the judgment. Justice Ashok Bhushan authored the opinion.

Case Background

The case revolves around a dispute regarding the pay scales of Junior Clerks in the Maharashtra State Treasury Department. Initially, the Government of Maharashtra, through a resolution dated 01 February 1965, established the Maharashtra Finance and Accounts Service, which included various posts like Senior and Junior Clerks in District Treasuries.

Later, a government resolution dated 28 December 1970, outlined the procedure for promoting clerks to the post of Senior Clerk. Subsequently, on 08 June 1995, the government decided that employees in Group C and D (previously Class III and IV) would receive the pay scale of the next promotional post after completing 12 years of continuous service.

On 20 July 2001, the State Government implemented a Service Career Development Scheme for its employees. A subsequent resolution on 26 October 2004, granted the pay scale of Deputy Accountant to Treasury/Sub-Treasury Clerks who had passed the Maharashtra Account Clerk examination and completed 12 years of service. This resolution led to the respondents receiving the Deputy Accountant pay scale from various dates starting 01 October 1994.

However, Senior Clerks, who were directly appointed and later confirmed, filed an Original Application in the Maharashtra Administrative Tribunal, arguing that the Deputy Accountant pay scale was meant for them and not Junior Clerks. This led to the Tribunal striking down the 26 October 2004 resolution on 17 November 2006. The High Court stayed this order, and the government withdrew the 26 October 2004 resolution on 11 September 2008.

The government then issued a letter on 06 October 2009, stating that employees would continue to receive the benefits, subject to an undertaking that they would refund the amount if the High Court upheld the withdrawal of the resolution. The respondents gave the undertaking and continued to receive the benefits.

The respondents then challenged the withdrawal of the resolution in the Maharashtra Administrative Tribunal. The High Court directed that the benefits already given should not be withdrawn until the Tribunal decided the matter. The Tribunal dismissed the Original Application on 04 December 2014, which led to the High Court partially allowing the writ petition, allowing recovery of excess payments after 11 September 2008. This Supreme Court appeal challenges that High Court decision.

Timeline

Course of Proceedings

The Maharashtra Administrative Tribunal initially struck down the Government Resolution dated 26 October 2004, which granted the Deputy Accountant pay scale to Junior Clerks. The Tribunal’s decision was challenged in the High Court, which stayed the Tribunal’s order. During the pendency of the writ petition, the Government withdrew the said resolution.

Subsequently, the Tribunal dismissed the Original Application challenging the withdrawal of the resolution. The High Court partly allowed the writ petition against the Tribunal’s order, permitting the recovery of excess payments made after 11 September 2008. This order was challenged before the Supreme Court.

Legal Framework

The case involves several key government resolutions:

• Government Resolution dated 01 February 1965: This resolution constituted the Maharashtra Finance and Accounts Service.
• Government Resolution dated 28 December 1970: This resolution provided the procedure for recruitment to the post of Senior Clerk, including promotion of clerks from the District Treasury.
• Government Resolution dated 08 June 1995: This resolution stated that employees in Group C and D would receive the pay scale of the next promotional post after completing 12 years of continuous service. It stated,
  “Employees holding posts in Group “C & D” (previously Class-III & Class IV) shall be given the pay scale of the next promotional post in the promotional hierarchy after completing 12 years of continuous service.”
• Government Resolution dated 20 July 2001: This resolution implemented the Service Career Development Scheme for State Government Employees.
• Government Resolution dated 26 October 2004: This resolution granted the pay scale of Deputy Accountant to Treasury/Sub-Treasury Clerks who had passed the Maharashtra Account Clerk examination and completed 12 years of service.
• Government Resolution dated 11 September 2008: This resolution withdrew the Government Resolution dated 26 October 2004.
• Government letter dated 06 October 2009: This letter stated that employees would continue to receive the benefits subject to an undertaking that they would refund the amount if the High Court upheld the withdrawal of the resolution.

The legal framework is based on the executive powers of the State Government to regulate the service conditions of its employees. The resolutions are within the domain of the State Government and can be modified or altered.

Arguments

Arguments by the Appellants:

• The appellants argued that they were correctly granted the benefits of the Deputy Accountant pay scale under the resolution dated 26 October 2004, which should not have been withdrawn.
• They contended that the resolution dated 08 June 1995, entitled them to the Deputy Accountant pay scale after completing 12 years of continuous service, irrespective of the withdrawal of the 2004 resolution.
• The appellants submitted that no recovery should be made for any period earlier to 04 December 2014, when the Tribunal rejected their Original Application. They relied on the High Court’s judgment dated 05 December 2009, stating that benefits given under the 2004 resolution should not be withdrawn until the Tribunal’s decision.

Arguments by the Respondents:

• The respondents argued that the benefits granted under the resolution dated 26 October 2004, were withdrawn by the resolution dated 11 September 2008.
• They contended that the appellants were not entitled to any benefits after the withdrawal and that the benefits received were based on an undertaking to refund the amount if the withdrawal was upheld.
• The respondents submitted that the resolution dated 08 June 1995, did not provide an avenue for Junior Clerks to receive the Deputy Accountant pay scale after 12 years of service.
• They argued that the High Court had already protected the appellants by allowing them to retain benefits received until 11 September 2008.

Submissions of Parties

Issues Framed by the Supreme Court

The Supreme Court framed the following issues for consideration:

1. Whether the Maharashtra Administrative Tribunal erred in upholding the Government Resolution dated 11 September 2008, by which the earlier Government Resolution dated 24 October 2004, was withdrawn?
2. Whether, despite the withdrawal of the Government Resolution dated 24 October 2004, the appellants were entitled to the pay scale of Deputy Accountant by virtue of Government Resolution dated 08 June 1995?
3. Whether the appellants are correct in their submission that amounts received by them until 04 December 2014, i.e., the date when the Maharashtra Administrative Tribunal rejected their claim, could not have been recovered, and the recoveries, if any, can be made for the period subsequent thereto?

Treatment of the Issue by the Court

Authorities

The Court considered the following authorities:

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• The Government Resolutions were interpreted to determine the pay scale entitlements of the Junior Clerks.
• The Tribunal’s order striking down the 2004 resolution was initially set aside by the High Court, but the Tribunal’s subsequent order upholding the withdrawal was ultimately affirmed.
• The High Court’s order protecting benefits until the Tribunal’s decision was upheld, with a modification to the date.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• The executive power of the State Government to modify service conditions through government resolutions.
• The need to correct the anomaly created by the 2004 resolution, which allowed Junior Clerks to receive a higher pay scale than Senior Clerks.
• The undertaking given by the employees to refund the excess amount if the withdrawal of the resolution was upheld.
• The High Court’s order protecting the benefits received until the Tribunal’s decision.

The Court emphasized that the 08 June 1995 resolution only entitled Junior Clerks to the pay scale of the next promotional post, which is Senior Clerk, not Deputy Accountant.

The Court also noted that the benefits received by the appellants until 04 December 2014, were protected by the High Court’s order, and the recovery could only be made for the period after that date.

Logical Reasoning

Judgment

The Supreme Court upheld the withdrawal of the Government Resolution dated 26 October 2004, stating that the State Government has the power to modify service conditions. The Court also clarified that the Government Resolution dated 08 June 1995, did not entitle Junior Clerks to the pay scale of Deputy Accountant.

The Court modified the High Court’s order regarding the recovery of excess payments. The High Court had allowed recovery of excess payments from 11 September 2008, but the Supreme Court modified this to 04 December 2014, the date when the Maharashtra Administrative Tribunal rejected the claim of the appellants.

The Court stated:

“The Maharashtra Administrative Tribunal did not commit any error in upholding the Government Resolution dated 11.09.2008.”

“We, thus, do not find any substance in the submission of the appellant that appellants were entitled for grant of pay-scale of Deputy Accountant despite withdrawal of the Resolution dated 26.10.2004.”

“We, thus, find substance in the submission of the learned counsel for the appellant that the benefit received by them till 04.12.2014 be not withdrawn when it pronounced that the Resolution dated 11.09.2008 was valid, the benefit received by the appellants thereafter can only be withdrawn.”

The judgment was unanimous, with both Justices Ashok Bhushan and Mohan M. Shantanagoudar agreeing on the decision.

Key Takeaways

• The State Government has the authority to modify or alter executive instructions regarding service conditions.
• Junior Clerks are not entitled to the pay scale of Deputy Accountant based on the Government Resolution dated 08 June 1995.
• Recovery of excess payments can only be made for the period after the Maharashtra Administrative Tribunal rejected the claim of the appellants on 04 December 2014.

This case clarifies the scope of government resolutions in determining pay scales and the conditions under which the government can recover excess payments made to its employees.

Directions

The Supreme Court modified the High Court’s direction regarding the recovery of excess payments. The respondents were directed to recover excess payments made to the petitioners after 04 December 2014, instead of 11 September 2008.

Development of Law

The ratio decidendi of this case is that the State Government has the power to modify service conditions through executive orders. Also, the court clarified that the resolution dated 08 June 1995, does not entitle Junior Clerks to the pay scale of Deputy Accountant. The court also held that recovery of excess payments should be made only after the date when the Tribunal rejected the claim of the appellants. This clarifies the position regarding pay scales and recovery of excess payments in similar cases.

Conclusion

The Supreme Court’s judgment in Shri Maruti Tukaram Bagawe vs. The State of Maharashtra clarifies the pay scale entitlement of Junior Clerks and the recovery of excess payments. The Court upheld the State Government’s power to modify service conditions and clarified the interpretation of the relevant government resolutions. The judgment provides clarity on the rights and obligations of government employees and the State in such matters.