Court says Salary Reduction and Designation Downgrade without prior notice violates principles of natural justice

The Patna High Court, through a single-judge bench led by Justice Satyavrat Verma, nullified the Bihar Education Department’s Pay Verification Cell’s decision to unilaterally reduce the salary and downgrade the designation of a university employee. The Court ruled that such actions, taken without prior notice or adherence to due process, violated principles of natural justice and contradicted an earlier ruling of the High Court. It clarified that the Pay Verification Cell is limited to an advisory and auditing role and lacks the authority to independently alter employee pay or status.

Background

The case involved petitioner Suray Deo Paswan, a non-teaching employee at Magadh University. Initially appointed as a Dresser in 1985, he was promoted to Dispenser in 2012. As of January 1, 2016, his salary was fixed at ₹49,600. However, the Pay Verification Cell later reduced his salary and downgraded his designation from Dispenser to Compounder without any notice or justification.

The petitioner challenged the action, claiming it violated principles of natural justice and disregarded a prior Patna High Court judgment that mandated specific procedural safeguards.

Key Arguments

For the Petitioner

Advocate Mr. Anil Singh argued that the Pay Verification Cell had exceeded its jurisdiction by making unilateral changes to the petitioner’s pay and designation. He emphasized:

• The lack of prior notice or consultation violated natural justice.
• A prior High Court ruling required notice and consultation with the employee and the University before any adverse decision.
• The doctrine of res ipsa loquitur applied, as the actions of the Pay Verification Cell spoke clearly of procedural violations and disregard for judicial precedents.

For Magadh University

Advocate Mr. Pankaj Kumar Singh contended that the University’s Pay Fixation Committee had acted within its legal authority when setting the petitioner’s pay. He argued:

• The Pay Verification Cell’s role was strictly advisory and did not extend to altering decisions already made by the University.
• The Cell’s actions in reducing pay and designation were procedurally flawed and unauthorized.

Court’s Findings

1. Violation of Natural Justice

The Court found that the Pay Verification Cell acted unilaterally, without notifying the petitioner or the University. The Court emphasized that any action causing adverse consequences to an individual requires prior notice and a hearing, which were absent in this case.

2. Disregard of Judicial Directives

The Court highlighted that its previous ruling mandated specific procedural steps for the Pay Verification Cell, which were ignored. It reiterated that the Cell cannot override or amend decisions made by the University without adhering to due process.

3. Arbitrary Actions by the Education Department

The Court criticized the Education Department’s undue haste in implementing the salary reduction. It noted that the delay in resolving pay fixation issues stemmed from the University’s inaction, not the petitioner’s fault.

4. Limited Jurisdiction of the Pay Verification Cell

The Court clarified that the Pay Verification Cell’s role is confined to auditing and advising. It cannot enforce decisions or make unilateral changes affecting employees’ pay or designation, as this authority lies solely with the University’s Pay Fixation Committee.

5. Impact on the Petitioner

The Court acknowledged that the salary reduction and demotion caused financial harm and professional embarrassment to the petitioner, who had served the University for decades.

Conclusion

The Court ruled in favor of the petitioner, declaring the Pay Verification Cell’s actions and the Education Department’s directive illegal. Both were quashed. The case was remanded to the State authorities for appropriate action in accordance with due process.

This judgment reaffirms the principles of natural justice and underscores the limited jurisdiction of the Pay Verification Cell in matters affecting employees’ rights and entitlements.