Madhya Pradesh High Court
Mohd. Shahid vs The State Of Madhya Pradesh on 6 February, 2018
1
WP Nos.5937-2016 & 13828-2016
HIGH COURT OF MADHYA PRADESH : JABALPUR
SB : HON'BLE SHRI JUSTICE J.K. MAHESHWARI
Writ Petition No.5937/2016
Rajendra Prasad Pandey
vs.
The State of M.P. & Others
Writ Petition No.13828/2016
Mohd. Shahid
vs.
The State of M.P. & Others
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Shri Mohan Lal Sharma, counsel and Shri Atul Kumar Rai,
counsel for the petitioner.
Shri Girish Kekre, Government Advocate for the
respondents/State.
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O R D E R
JABALPUR-Dated: 06.02.2018 WP No.5937/2016 has been filed challenging the order of recovery as per Annexure-P/1 and P/2 while WP No.13828/2016 has been filed challenging the order of recovery as per Annexure-P/1.
2WP Nos.5937-2016 & 13828-2016 2- It is not in dispute that both the petitioners have retired from their departments after attaining the age of superannuation and thereafter the recovery has been ordered from their retiral dues.
3- The State Government has filed their reply inter alia contending that the petitioners have given the undertaking with respect to the excess payment of the amount, if any, however, in the light of the said undertaking and in the light of the judgment of the Supreme Court in the case of High Court of Punjab & Haryana & others vs. Jagdev Singh reported in (2016) 14 SCC 267 such recovery has rightly been ordered.
4- After having heard, learned counsel appearing on behalf of both the parties, the issue involved in the present cases is squarely covered by the judgment delivered by this Court in WP No.2395/2017 (Vijay Shankar Trivedi vs. The State of M.P. & Others) wherein this Court has considered the judgment of the Supreme Court in the case of State of Punjab & others vs. Rafiq Masih (White Washer) 3 WP Nos.5937-2016 & 13828-2016 reported in 2014(4) SCC 334 and Jagdev Singh (Supra) as well as of other High Courts, and after considering the same, this Court has observed as under:-
"6. The issue regarding recovery from the employee either in service or after attaining the age of superannuation, came for consideration before the Supreme Court in the case of Rafiq Masih (supra) wherein the Apex Court in Para-12 has postulated certain categories and observed that the recovery from them is impermissible. Para-12 is relevant, however, it is reproduced as thus:-
"12. It is not possible to postulate all situations of hardship, which would govern employees on the issue of recovery, where payments have mistakenly been made by the employer, in excess of their entitlement. Be that as it may, based on the decisions referred to herein above, we may, as a ready reference, summarise the following few situations, wherein recoveries by the employers, would be impermissible in law:
(i) Recovery from employees belonging to Class-III and Class-IV service (or Group 'C' and Group 'D' service).
(ii) Recovery from retired employees, or employees who are due to retire within one year, of the order of recovery.
(iii) Recovery from employees, when the excess payment has been made for a period in excess of five years, before the order of recovery is issued.
(iv) Recovery in cases where an employee has wrongfully been required to discharge duties of a higher post, and has been paid accordingly, 4 WP Nos.5937-2016 & 13828-2016 even though he should have rightfully been required to work against an inferior post.
(v) In any other case, where the Court arrives at the conclusion, that recovery if made from the employee, would be iniquitous or harsh or arbitrary to such an extent, as would far outweigh the equitable balance of the employer right to recover."
7. The judgment of Rafiq Masih (supra) came for consideration in the judgment of Jagdev Singh (supra) wherein the Supreme Court in Para-10 after referring five categories, in which recovery was held to be impermissible in the case of Rafiq Masih (supra), referring Clause (ii) in Para-11 and 12 has held as under:-
"11. The principle enunciated in proposition (ii) above cannot apply to a situation such as in the present case. In the present case, the officer to whom the payment was made in the first instance was clearly placed on notice that any payment found to have been made in excess would be required to be refunded. The officer furnished an undertaking while opting for the revised pay scale. He is bound by the undertaking.
12. For these reasons, the judgment of the High Court which set aside the action for recovery is unsustainable. However, we are of the view that the recovery should be made in reasonable instalments. We direct that the recovery be made in equated monthly instalments spread over a period of two years."
8. After the judgment of Jagdev Singh (supra), the issue came for consideration before the Division Bench of the High Court of Rajasthan in Mohdmmed Yusuf (supra) wherein the Division Bench has held as under:-
5WP Nos.5937-2016 & 13828-2016 "In the case in hand it is not disputed that the fixation impugned were made atlest 10 years earlier i.e. from the date the respondent University pass an order to effect recovery. It is also the position admitted that the appellants prior to their retirement were in employment of the University on the post of Technician/Junior Mechanic, the posts is Group-C cadre and the appellants stood retired from service much back in the year 2002. So far as the issue with regard to undertaking given by them is concerned, that cannot be equated with the undertaking given by the Officer whose case was dealt with by the Hon'ble Apex Court in the State of Punjab & Haryana & Ors. (supra). In the case aforesaid, the person concerned was a Civil Judge (Junior Division) and further the undertaking given by him was in quite specific terms that any payment found to have been made in excess would be liable to be adjusted and further that fixation of the refund made was to be used for adjustment of excess payment, if any given.
In the instant matter, the undertaking said to be given is in a proforma that simply mentions for refund of over payments, if any made, on account of incorrect fixation. The undertaking is a part of proforma and it is well known that the persons belonging to lower posts put signatures on such undertaking without application of mind.
In these circumstances, we are of the considered opinion that cases of the present appellants are required to be dealt with in accordance with law laid down by the Apex Court in the case of Rafiq Masih (supra).
The appeals are accordingly allowed. The judgment impugned dated 24.2.2004 passed by the learned Single Bench is set aside. The writ 6 WP Nos.5937-2016 & 13828-2016 petitions preferred by the petitioners are allowed to the extent that the respondent University shall not effect any recovery from pay/pensionary benefits/post retiral benefits or otherwise from them on account of the amount said to be paid in excess while awarding selection grades or making pay fixation.
9. In the said judgment the Court distinguished the judgment of Jagdev Singh (supra) on the pretext that if a person belong to Group-C retired from the service and given his undertaking, which cannot be equated with the undertaking given by the Civil Judge (Junior Division), which was dealt with in the case of Jagdev Singh (supra). It was further held that the undertaking is not specific to the recovery, however, it cannot be relied upon. Thus relying upon the judgment of Rafiq Masih (supra) and setting aside the order passed by learned Single Judge, the recovery was quashed.
10. The Division Bench judgment of High Court of Rajasthan in Mohammed Yusuf (supra) has been considered by co-ordinate Bench of this Court in Kapsi Bai (supra) wherein the defence taken by the State Government regarding undertaking given by the employee was negatived and the recovery was quashed.
11. The issue regarding recovery from a retired employee also came for consideration in the case of Om Prakash Verma Vs. State of M.P. & others reported in 2017(3) MPLJ 175 whereby the Single Bench of this Court quashed the recovery distinguishing the judgment of Jagdev Singh (supra) stating that the said judgment only deals proposition No. (ii) of the judgment of Rafiq Masih (supra) and do not apply for other propositions particularly to the case of Group-C and Group-D employees.
12. The Division Bench of this Court in The State of Madhya Pradesh & others Versus Chandrashwar 7 WP Nos.5937-2016 & 13828-2016 Prasad Singh (supra) vide order dated 15.12.2017 has considered the same arguments advanced on behalf of the State Government relying upon the judgment of Jagdev Singh (supra) and the Court held as under:-
We find that the said judgment relied upon by learned counsel for the State has no applicability in the facts of the present case as the undertaking itself is unconscionable writing obtained by the State. The employee has no option but to submit undertaking to avail the benefit of pay-fixation. In a judgment of the Supreme Court reported as (1986) 3 SCC 136 (Central Inland Water Transport Corporation Limited and Another v. Brojo Nath Ganguly and Another), a condition in the appointment letter that the Corporation could terminate the services of the employees without prior notice if it was satisfied that the employee was unfit medically or was guilty of any subordination in respect of other misconduct, was found to be illegal. The Supreme Court held as under:-
68. We now turn to the second question which falls for determination in these Appeals, namely, whether an unconscionable term in a contract of employment entered into with the Corporation, which is "the State" within the meaning of the expression in Article 12, is void as being violative of Article 14. What is challenged under this head is clause (i) of Rule 9 of the said Rules. This challenge levelled by the Respondent in each of these two Appeals succeeded in the High Court.
xxx xxx
78. Legislation has also interfered in many cases to prevent one party to a contract from taking undue or unfair advantage of the 8 WP Nos.5937-2016 & 13828-2016 other. Instances of this type of legislation are usury laws, debt relief laws and laws regulating the hours of work and conditions of service of workmen and their unfair discharge from service, and control orders directing a party to sell a particular essential commodity to another.
xxx xxx
93. The normal rule of Common Law has been that a party who seeks to enforce an agreement which is opposed to public policy will be non-suited. The case of A. Schroeder Music Publishing Co. Ltd. v. Macaulay [(1974) 1 WLR 1308], however, establishes that where a contract is vitiated as being contrary to public policy, the party adversely affected by it can sue to have it declared void.
The case may be different where the purpose of the contract is illegal or immoral. In Kedar Nath Motani and others v. Prahlad Rai and others, [1960] 1 S.C.R. 861 reversing the High Court and restoring the decree passed by the trial court declaring the appellants' title to the lands in suit and directing the respondents who were the appellants' benamidars to restore possession, this Court, after discussing the English and Indian law on the subject, said (at page 873):
"The correct position in law, in our opinion, is that what one has to see is whether the illegality goes so much to the root of the matter that the plaintiff cannot bring his action without relying upon the illegal transaction into which he had entered. If the illegality be trivial or venial, as stated by Willistone and the plaintiff is not required to rest his case upon that illegality, then public policy demands that the defendant should not be allowed to take 9 WP Nos.5937-2016 & 13828-2016 advantage of the position. A strict view, of course, must be taken of the plaintiff's conduct, and he should not be allowed to circumvent the illegality by restoring to some subterfuge or by mis-stating the facts. If, however, the matter is clear and the illegality is not required to be pleaded or proved as part of the cause of action and the plaintiff recanted before the illegal purpose was achieved, then, unless it beof such a gross nature as to outrage the conscience of the Court, the plea of the defendant should not prevail."
The types of contracts to which the principle formulated by us above applies are not contracts which are tainted with illegality but are contracts which contain terms which are so unfair and unreasonable that they shock the conscience of the court. They are opposed to public policy and require to be adjudged void. In view of the aforesaid judgment, we find that since the employee has no option but to give undertaking so as to avail the benefit of pay fixation, it cannot be said to be voluntary act thus, such undertaking cannot be made basis for sustaining the recovery of Rs.87,354/-.
13. The said judgment has again been relied upon in the case of Phoolchand Patel (supra) by the Co- ordinate Bench of this Court quashing the order of recovery directed against the petitioner.
14. In view of the foregoing discussion, the legal position which can be culled out is that the judgment of Jagdav Singh (supra) is a judgment on proposition No. (ii) of the judgment of Rafiq Masih (supra). Proposition No. (ii) deals the recovery from retired Government employees or the employees who are due to retire within one year from the order of 10 WP Nos.5937-2016 & 13828-2016 recovery. The Division Bench of the High Court of Rajasthan in Mohammed Yusuf (supra) distinguished the ratio of the judgment of Jagdev Singh (supra) on facts reiterated in the undertaking, if any, given by the Civil Judge, as was the case before the Supreme Court, would not apply in the case of Group-C employees, while Division Bench of this Court in the case of Chandrashwar Prasad Singh (supra) distinguished the same taking a view that if any undertaking has been obtained from an employee at the time of availing the benefit of pay fixation, it cannot be said to be voluntary act on his part because the said employee was having no option except to give such undertaking, it cannot be made the basis for sustaining the recovery. Though the Single Bench in the case of Om Prakash (supra) distinguished the judgment of Jagdev Singh (supra) on the pretext that the petitioner is a Class III employee but in the case at hand though the petitioner was a Class III employee now retired, therefore, this Court merely referred the said judgment to accept the analogy as taken by the High Court of Rajasthan in the case of Mohammed Yusuf (supra) as well as by this Court in the case of in the case of Chandrashwar Prasad Singh (supra).
15. Looking to the aforesaid legal position, it is necessary to analize the facts of the present case. On perusal, it reveals that the State Government vide order dated 5.11.2016 said that the petitioner is not entitled for the pay scale which was allowed to him from the initial date of appointment, therefore, recovery to the tune of Rs.23,43,433/- along with the interest has been ordered vide order Annexure P-6 dated 23.11.2016. The undertakings which are brought on record relates to fixation of pay at the time of pay revision; first undertaking was submitted on 21.4.1987 and subsequent undertaking is undated. Its language indicates that the benefit of revision of pay extended to the petitioner is 11 WP Nos.5937-2016 & 13828-2016 provisional and at the time of its finalization, excess amount may be returned back or may be deducted from him. However, looking to the said fact the analogy drawn by Division Bench of this Court in the case of Chandrashwar Prasad Singh (supra) aptly applies to the facts of this case because the said undertaking was obtained from the petitioner at the time of extending the benefit of pay revision and such act of the petitioner cannot be said to be voluntary act. In view of the said discussion distinguishing the judgment of Jagdev Singh (supra), and applying the ratio of Rafiq Masih (supra) the order of recovery Annexure P-6 dated 23.11.2017 is hereby quashed."
5- Considering the aforesaid, the undertaking as referred by the respondents in the return does not constitute that after retirement, the recovery on the basis of the said undertaking can be made by the respondents.
6- The ratio of the judgment of Vijay Shankar Trivedi (supra) squarely applies in these cases, therefore, the order of recovery Annexure-P/1 and P/2 in WP No.5937/2016 and Annexure-P/1 in WP No.13828/2016 are hereby quashed.
7- Accordingly, both these petitions succeed and hereby allowed. On account of quashing the orders of recovery the respondents are directed to pay all the retiral dues and 12 WP Nos.5937-2016 & 13828-2016 pensionerary benefits within a period of three months, otherwise, the interest @ 7.5% shall be leviable and payable to the petitioner.
8- With the aforesaid observation, this petition stands disposed of.
(J.K. Maheshwari) Judge DPS Digitally signed by DHEERAJ PRATAP SINGH Date: 2018.02.08 19:25:59 +05'30'