Rs 25.75 lakh recovered from a retired teacher must go back, with six per cent interest

Justice Neena Bansal Krishna held a study leave bond clause unenforceable against the Study Leave Rules, and found recovery barred by Rafiq Masih in any event.

A teacher who retired from a Delhi University college at the end of November 2011, and from whom the University went on to recover more than Rs 25 lakh, has had both recoveries reversed with interest after fourteen years of litigation. Justice Neena Bansal Krishna found that the increments he drew during study leave had been properly sanctioned under the rules, that the clause of his 1983 study leave bond the University relied on is contrary to the Study Leave Rules, 1979 and cannot be enforced against him, and that recovery would have been impermissible anyway on the tests laid down in Rafiq Masih. The recoveries had cut his gross retiral dues from Rs 33,04,834 to Rs 5,29,104.

Two petitions, one grievance

The petitioner was on the staff of Swami Shraddhanand College, University of Delhi, at Alipur. He filed W.P.(C) 630 of 2012 and W.P.(C) 6964 of 2012, the second of which concerned circulars issued by the University in February and October 2012. Both were reserved on 9 July 2026 and pronounced on 8 October 2026. He appeared in person alongside Mr. Ravindra S. Garia and Mr. Shashank Singh; Mr. Mohinder Rupal, Mr. Hardik Rupal, Ms. Aishwarya Malhotra and Ms. Tripta Sharma appeared for the Deputy Registrar of the University's Pension Cell.

The dispute was about what his pay was at the point he stopped working. He had actually drawn a basic pay of Rs 55,460 with grade pay of Rs 9,000 at the time of retirement. The University's position, reflected in what it then recovered from him, was that he should not have been drawing it.

No error to correct in the first place

The recovery arose out of study leave the petitioner had taken decades earlier, and a bond he signed on 15 September 1983. The University's case was that his studies were not completed, which under Clause 2 of that bond was a ground for recovery, and that the increments he had drawn during the leave had to be withdrawn.

The judgment finds there was no error to correct. The increments during study leave were sanctioned in terms of Rule (vi), and the pay the petitioner drew was the pay to which he was entitled under the Rules. It then goes to the bond itself: Clause 2, to the extent it makes non-completion of studies a ground for recovery, is contrary to the Study Leave Rules, 1979, and cannot be enforced against him.

Rafiq Masih, three ways over

The Bench went on to hold that even if the payments were treated as excess, the recovery would be impermissible, and tested the facts against State of Punjab v. Rafiq Masih, (2015) 4 SCC 334, which lists the situations in which an employer cannot recover. Three of them are engaged here: recovery from retired employees, or those due to retire within a year of the recovery order; recovery where the excess payment was made over a period exceeding five years before the order; and the residual category where recovery would be iniquitous, harsh or arbitrary to an extent far outweighing the employer's right to recover.

Each, the judgment holds, is squarely attracted. The recovery was made after retirement. It concerned payments spanning twenty-eight years. And it reduced the petitioner's gross retiral dues from Rs 33,04,834 to Rs 5,29,104 — leaving him about a sixth of what was due. No undertaking to refund was taken from him when the increments were sanctioned; the undertaking the College sought on 14 March 2012 was only a condition for releasing the net amount after he had already retired.

Because the action failed on the Rules and for want of authority of law, the Bench recorded that his separate plea of discrimination did not need to be examined.

What was restored

The University and the College must restore the petitioner's pay as actually drawn — basic pay of Rs 55,460 plus grade pay of Rs 9,000 at the time of retirement — and recompute his pension, the commuted value of pension and his leave encashment on that basis, paying arrears of pension with effect from 1 December 2011. The tax on leave encashment is to be recomputed on the revised figure.

The money going back

Two sums had been taken from him: Rs 11,40,537 as salary and Rs 14,35,213.75 from his Provident Fund, together a little over Rs 25.75 lakh. Both are unsustainable and are to be paid back. One small item survives: a recovery of Rs 1,700 towards leave travel concession was not shown to have any connection with the study leave, and the Court did not interfere with it.

They do not go back alone. Those amounts, together with the differential in retiral benefits produced by the recomputation, carry simple interest at six per cent per annum from 1 December 2011 until the date of payment — which, on a retirement dating to 2011 and an order in late 2026, is close to fifteen years of interest.

All of the directions are to be complied with within sixteen weeks.

Order

W.P.(C) 630 of 2012 was allowed. Point 14 of the communication of 7 September 2011, the communication of 23 January 2012, and the consequent re-fixation of pay and recoveries from his retiral benefits were quashed, along with the finding on Clause 2 of the bond. All the directions are to be complied with within sixteen weeks.

The second petition fell away for a reason the judgment sets out carefully. W.P.(C) 6964 of 2012 challenged a circular of 9 February 2012 directing colleges to enforce a paragraph of the Leave Rules, 2002, and one of 19 October 2012 leaving the cases of teachers granted study leave up to 2002 to their Governing Bodies under the study leave bond. Neither circular was the source of the action against this petitioner: the recovery had been set in motion by the communication of 7 September 2011, before either was issued, and the University itself stated that the February 2012 circular was of no consequence so far as he was concerned. His grievance being fully redressed in the first petition, the validity of the circulars — insofar as they may affect other teachers who are not before the Court — did not call for adjudication at his instance. Pending applications stand disposed of.