4-year limit, HC says can’t recover old losses from retired employee

The Punjab and Haryana High Court has made it clear that recovery proceedings cannot be initiated against a retired employee for losses caused during service if the charges pertain to incidents that are more than four years old.

The ruling came in response to a petition filed by a retired Ayurvedic Medical Officer after he was made liable to reimburse the “financial loss caused to the State Exchequer”.

Citing the relevant provisions under Rule 2.2 (b) of the Punjab Civil Services Rules, Justice Harsimran Singh Sethi of the high court also set aside the order for recovering more than Rs 8.97 lakh.

Appearing before the Bench, counsel Manu K. Bhandari contended that the officer had been held liable for alleged financial irregularities that occurred during his tenure in 1996 and 2004-2005.

After hearing detailed arguments and going through the relevant provisions of law, Justice Sethi asserted that recovery under the rules could only be initiated for incidents that occurred within four years of an employee’s retirement. Since the charges against the officer related to incidents were more than four years old, the State’s recovery action was deemed illegal.

In his detailed order, Justice Sethi observed that Rule 2.2 (b) expressly prohibited recovery proceedings for events that were more than four years old. The court made it clear that the State could not wait until an employee retired and then dig up old records to initiate recovery for incidents long past the permissible period. The statutory rule imposed a limitation period for initiating recovery proceedings and ignoring the same would lead to grave injustice for retirees.

The ruling is significant as it reiterates that limitations exist to protect retired employees from harassment. The judgment notes that holding employees accountable for old incidents without timely action while they are still in service not only violates their rights but also causes undue financial distress.

Before parting with the order, Justice Sethi took note of Bhandari’s submission that the petitioner had no objection in case another Rs 49,000 was recovered “so as to bury the issue in order to live peacefully, though he has due explanation even for the same”.

Justice Sethi asserted further finding were not required to be recorded on the issue as the petitioner had undertaken to deposit the amount. “In case, the said amount has not been deposited/recovered so far, appropriate action can be taken by the respondents in this regard,” the court concluded.