P.C.Verma vs National Seeds Corporation Ltd on 30 May, 2022

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Delhi High Court - Orders

P.C.Verma vs National Seeds Corporation Ltd on 30 May, 2022

1. The instant petition under Article 226 and 227 of the Constitution of India has been filed on behalf of the petitioner for issuing writ of certiorari or any other appropriate writ for quashing of order bearing no. 4(2187)/82- Pers/NSC/2676 dated 24th November, 2009 passed by General Manager (Administration) of the respondent.

2. No one has appeared on behalf of the respondent. Since the instant matter is pending since 2010, this Court is left with no option but to adjudicate the matter in the absence of the respondent.

3. Learned counsel appearing on behalf of the petitioner submitted that the petitioner was working as Seed Officer with respondent M/s Seeds Corporation Ltd. Vide office order no. 120 dated 4 th August, 1995, all employees of group B, C and D of the respondent who had completed 10 Signature Not Verified Digitally Signed By:GAURAV SHARMA Signing Date:02.06.2022 10:24:21 years of regular service on or before 1st April, 1995, was granted one upward time scale of pay.

4. Learned counsel for the petitioner submitted that the petitioner had joined the respondent as Assistant Seed Officer on 26th June, 1982. Since the petitioner had completed 10 years of regular service on 25th June, 1992 i.e. prior to 1st April, 1995, therefore, in compliance of the aforesaid office order, the basic pay of the petitioner was enhanced to Rs. 2,450/- (in the pay scale of Rs.2,000-3,500) from Rs. 2,375/- (in the pay scale of Rs.2000-3500) with effect from 1st June, 1995.

5. Subsequently, the petitioner was promoted to the rank of seed officer with effect from 28th June, 1999 having the pay scale of Rs.6,500 - 10,500/. After his promotion to the rank of seed officer, the basic pay of the petitioner was fixed at Rs. 8,700/- (in the pay scale of Rs. 6,500-10,500) vide office order dated 16th August, 1999. In the year 2002, in the year 2002, the Board of Directors of the respondent in their meeting held on 26th September, 2002 decided to review the office order No. 120 dated 29th September, 2009 and in pursuance of the decision taken in the said meeting, another office order bearing No. 165 dated 8th November, 2002 was issued by the respondent wherein the respondent decided to refix the pay of those employee who were granted time scale of pay on or before 1st April, 1995 on completion of 10 years service in the scale as per the provisions under FR- 22(l)(a)(l).

6. Learned counsel for the petitioner submitted that the respondent issued a show cause notice dated 29th September, 2009 to the petitioner, whereby the petitioner was asked to show cause why the sum of Rs. 47,053/- should not be recovered from his pay as arrears in pursuance of office order Signature Not Verified Digitally Signed By:GAURAV SHARMA Signing Date:02.06.2022 10:24:21 no. 165 dated 8th November, 2002. The petitioner filed his reply dated 30 th October, 2009 to the said show cause dated 20th September, 2009, whereby the petitioner disputed the legality as well as authority of the respondent to recover the alleged arrears on the ground that decision on enhancement of salary had been taken by the competent authority and there was no fault of his and in view of the same, there is no occasion for recovery of the same from the petitioner.

7. Learned counsel for the petitioner submitted that the decision to grant one upward time scale to the petitioner was taken by a competent authority as the petitioner was eligible to get the same having completed more than 10 years of service on 1st April, 1995 and the same was given to the petitioner without any fault of him.

8. It is well settled law that when the petitioner is not at fault, no recovery of arrears can be effected from him. He has relied upon the judgment of the Hon'ble Supreme Court in the case of Sham Babu Verma & Ors. Vs. Union of India & Ors, (1994) 2 SCC 521.

9. Learned counsel for the petitioner submitted that the decision of re- fixation of pay of employees who were granted upward time scale of pay on or before 1st April, 1995 on completion of ten years of service was taken on 8th November, 2002 i.e., after seven years of issuance of office order No. 120 dated 4th August, 1995 and therefore, in the absence of any fault of the petitioner, it will not just and proper to direct recovery of the alleged excess money paid to the petitioner and it is also submitted that the petitioner had already been superannuated from his service in 2017.

10. Heard learned counsel for the petitioner and perused the record.

11. This Court has also perused the counter affidavit filed by the Signature Not Verified Digitally Signed By:GAURAV SHARMA Signing Date:02.06.2022 10:24:21 respondent. In the affidavit, it is contended that the order dated 24 th November, 2009 passed by the respondent on the basis that since the pay was fixed under Fundamental Rule 22 (1) (a) (1) after financial upgradation in the old pay scale Rs. 2000-60-2300-EB-75-3200-100-3500 (1986), revised pay scale Rs. 6500-200-10500 (1996) therefore, the benefit of Fundamental Rule 22 (1) (a) (1) (Old Fundamental Rule 22 (C) could not be made applicable in the same pay scale at the time of promotion, though he will be entitled to promotion. It is submitted that in the office order No.165 dated 8.11.2002 it was made clear that the financial benefit allowed at the time of re-fixation of the pay scale in the time scale of pay on completion of 10 years service in the scale as per Fundamental Rule 22 (1) (a) (1) (Old Fundamental Rule 22 (C)), shall be final and no pay fixation benefit shall be given at the time of promotion. In the case of the petitioner since it was wrongly done at the time of revision of the pay scales, the error was rightly corrected by the answering respondent by order dated 24th November, 2009. In paragraph 10 of the counter affidavit, the respondent has made following contentions:

"That it is submitted that the fixation of pay, at the time of promotion in the case of employees, who were already holding the same time scale of pay, as is applicable on promotion in the cadre, was objected by the Audit, in the light of the Fundamental Rule FR.22(1)(a)(1) (Old FR-22(C). Accordingly, a reference was made to the Administrative Ministry for seeking clarification in the matter, where it was clarified by the Ministry that the pay fixation formula adopted by the NSC- answering respondent at the time of promotion of the employees, who were already given the next time scale is incorrect as the next time scale and the promotional scale, being the same. It is further submitted that a committee was constituted for solving the matter, in a more democratic manner Signature Not Verified Digitally Signed By:GAURAV SHARMA Signing Date:02.06.2022 10:24:21 and keeping a broader perspective of the issue, the committee in its meeting dated 25.1.2002, taking into consideration of the provisions under Assured, Career Progression Scheme (ACP Scheme) applicable for the Central Government Civilian Employees, issued by the Government of .India, Ministry of Personnel, Public Grievances and Pension, Department of Personnel and Training vide CM No. 35034/1/97-Estt.(P) dated 9.8.1999, came to the conclusion that, on upgradation under the ACP Scheme, pay of an employee is fixed under the provisions of FR-22(1)(a)(1). The financial benefit allowed under the ACP Scheme is final and no fixation benefit accrues at the time of regular promotion. The Committee recommended, placing this matter before the Board for considering amendment in the pay fixation clause of time scale at par with the provisions of the ACP Scheme in central government. It is submitted that accordingly, the matter was placed before the Board of Directors and after considering the recommendations of the Committee, the Board of Directors, had decided to re-fix the pay at par with the provisions laid down under FR- 22(1)(A)(1) [OLD FR-22(C)], as the time scale has already been given and no pay fixation benefits shall accrue at the time of promotion."

12. In view of the paragraph 10 of the counter affidavit, it is admitted fact there is no fault of the petitioner in fixation of the pay scale as per the order dated 4th August, 1995. It is also admitted fact that the amount received by the petitioner was not because of any fraud on the part of the petitioner.

13. After perusing the material on record, the excess payment made to the petitioner was not on account of the misrepresentation or fraud on his part. The excess payment, if any, was made due to mistake by the respondent and the petitioner is also retired from his service in 2017.

14. The Hon'ble Supreme Court in catena of decisions has consistently held that if the excess amount was not paid on account of any Signature Not Verified Digitally Signed By:GAURAV SHARMA Signing Date:02.06.2022 10:24:21 misrepresentation or fraud of the employee or if such excess payment was made by the employer by applying a wrong principle for calculating the pay/allowance or on the basis of a particular interpretation of rule/order which is subsequently found to be erroneous, such excess payment of emoluments or allowances are not recoverable.

15. In the case of Sahib Ram v. State of Haryana and Others, 1995 Supp (1) SCC 18, the Hon'ble Supreme Court has restrained recovery of payment which was given under the upgraded pay scale on account of wrong construction of relevant order by the authority concerned, without any misrepresentation on part of the employees. It was held that:

"5. Admittedly the appellant does not possess the required educational qualifications. Under the circumstances the appellant would not be entitled to the relaxation. The Principal erred in granting him the relaxation. Since the date of relaxation, the appellant had been paid his salary on the revised scale. However, it is not on account of any misrepresentation made by the appellant that the benefit of the higher pay scale was given to him but by wrong construction made by the Principal for which the appellant cannot be held to be at fault. Under the circumstances the amount paid till date may not be recovered from the appellant. The principle of equal pay for equal work would not apply to the scales prescribed by the University Grants Commission. The appeal is allowed partly without any order as to costs."

16. Similarly in Col. B. J. Akkara (Retd.) v. Government of India and Others 2 (2006) 11 SCC 709, the Hon'ble Supreme Court held that:

"27. The last question to be considered is whether relief should be granted against the recovery of the excess payments made on account of the wrong interpretation/understanding of the circular dated 7-6-1999. This Court has consistently granted relief against recovery of excess wrong payment of Signature Not Verified Digitally Signed By:GAURAV SHARMA Signing Date:02.06.2022 10:24:21 emoluments/allowances from an employee, if the following conditions are fulfilled (vide Sahib Ram v. State of Haryana [1995 Supp (1) SCC 18 : 1995 SCC (L&S) 248], Shyam Babu Verma v. Union of India [(1994) 2 SCC 521 : 1994 SCC (L&S) 683 : (1994) 27 ATC 121] , Union of India v. M. Bhaskar [(1996) 4 SCC 416 : 1996 SCC (L&S) 967] and V. Gangaram v. Regional Jt. Director [(1997) 6 SCC 139 : 1997 SCC (L&S) 1652] ):

(a) The excess payment was not made on account of any misrepresentation or fraud on the part of the employee.

(b) Such excess payment was made by the employer by applying a wrong principle for calculating the pay/allowance or on the basis of a particular interpretation of rule/order, which is subsequently found to be erroneous.

28. Such relief, restraining back recovery of excess payment, is granted by courts not because of any right in the employees, but in equity, in exercise of judicial discretion to relieve the employees from the hardship that will be caused if recovery is implemented. A government servant, particularly one in the lower rungs of service would spend whatever emoluments he receives for the upkeep of his family. If he receives an excess payment for a long period, he would spend it, genuinely believing that he is entitled to it. As any subsequent action to recover the excess payment will cause undue hardship to him, relief is granted in that behalf. But where the employee had knowledge that the payment received was in excess of what was due or wrongly paid, or where the error is detected or corrected within a short time of wrong payment, courts will not grant relief against recovery. The matter being in the realm of judicial discretion, courts may on the facts and circumstances of any particular case refuse to grant such relief against recovery.

29. On the same principle, pensioners can also seek a direction Signature Not Verified Digitally Signed By:GAURAV SHARMA Signing Date:02.06.2022 10:24:21 that wrong payments should not be recovered, as pensioners are in a more disadvantageous position when compared to in service employees. Any attempt to recover excess wrong payment would cause undue hardship to them. The petitioners are not guilty of any misrepresentation or fraud in regard to the excess payment. NPA was added to minimum pay, for purposes of stepping up, due to a wrong understanding by the implementing departments. We are therefore of the view that the respondents shall not recover any excess payments made towards pension in pursuance of the circular dated 7-6-1999 till the issue of the clarificatory circular dated 11-9-2001. Insofar as any excess payment made after the circular dated 11-9-2001, obviously the Union of India will be entitled to recover the excess as the validity of the said circular has been upheld and as pensioners have been put on notice in regard to the wrong calculations earlier made."

17. In State of Punjab and Others v. Rafiq Masih (White Washer and Others (2015) 4 SCC 334, wherein the Hon'ble Supreme court examined the validity of an order passed by the State to recover the monetary gains wrongly extended to the beneficiary employees in excess of their entitlements without any fault or misrepresentation at the behest of the recipient. This Court considered situations of hardship caused to an employee, if recovery is directed to reimburse the employer and disallowed the same, exempting the beneficiary employees from such recovery. It was held thus:

"8. As between two parties, if a determination is rendered in favour of the party, which is the weaker of the two, without any serious detriment to the other (which is truly a welfare State), the issue resolved would be in consonance with the concept of justice, which is assured to the citizens of India, even in the Preamble of the Constitution of India. The right to recover being pursued by the employer, will have to be compared, with the effect of the recovery on the employee concerned. If the Signature Not Verified Digitally Signed By:GAURAV SHARMA Signing Date:02.06.2022 10:24:21 effect of the recovery from the employee concerned would be, more unfair, more wrongful, more improper, and more unwarranted, than the corresponding right of the employer to recover the amount, then it would be iniquitous and arbitrary, to effect the recovery. In such a situation, the employee's right would outbalance, and therefore eclipse, the right of the employer to recover.

18. 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 hereinabove, we may, as a ready reference, summarise the following few situations, wherein recoveries by the employers, would be impermissible in law:

(i) Recovery from the employees belonging to Class III and Class IV service (or Group C and Group D service).

(ii) Recovery from the retired employees, or the employees who are due to retire within one year, of the order of recovery.

(iii) Recovery from the 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, 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's right to recover."

18. Coming to facts of the present case, it is not contended that on account of the misrepresentation or fraud played by the petitioner, the excess amounts have been paid. The petitioner has been retired from his service in Signature Not Verified Digitally Signed By:GAURAV SHARMA Signing Date:02.06.2022 10:24:21 2017. In fact the case of the respondent is that excess payment was made due to mistake or error made on the earlier occasion which was subsequently corrected by the respondent vide order dated 8th November, 2002.

19. Having regard to the above, I am of the view that an attempt to recover the said amount after the passage of more than 5 years of his retirement is unjustified.

20. In view of the above facts and circumstances, this Court is inclined to set aside the order bearing No. 4 (2187)/82-Pers/NSC/2676 dated 24th November, 2009 passed by the General Manger (Administration) of the respondent which is annexed as Annexure P-5.

21. Accordingly, the impugned order dated 24th November 2009 passed by General Manger (Administration) is set aside and the instant petition is allowed.

CHANDRA DHARI SINGH, J MAY 30, 2022 gs/ct Signature Not Verified Digitally Signed By:GAURAV SHARMA Signing Date:02.06.2022 10:24:21

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Delhi High Court - Orders