Orissa High Court
Sukanta Kumar Sahu And Others vs State Of Odisha And Others .... Opposite ... on 8 November, 2024
Author: S.K. Panigrahi
Bench: S.K. Panigrahi
Signature Not Verified
Digitally Signed
Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 18-Nov-2024 19:08:04
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) No. 31778 of 2011
and
W.P.(C) No.4595 of 2012
(In the matters of applications under Articles 226 and 227 of the
Constitution of India, 1950).
Sukanta Kumar Sahu and Others .... Petitioner(s)
(In W.P.(C) No.31778 of 2011)
Rangila Rai
(In W.P.(C) No.4595 of 2012)
-versus-
State of Odisha and others .... Opposite Party (s)
Advocates appeared in the case through Hybrid Mode:
For Petitioner(s) : Mr. Swayam Prabhu Jena, Adv.
on behalf of Mr. S.B. Jena, Adv.
(in W.P.(C) No.31778 of 2011)
Mr. Debendra K. Sahoo-1, Adv.
(in W.P.(C) No.4595 of 2012)
For Opposite Party (s) : Mr. Gyanaranjan Mohapatra, ASC
Mr. P.K. Rout, Adv.
for O.Ps.2 to 5
CORAM:
DR. JUSTICE S.K. PANIGRAHI
DATE OF HEARING:-05.08.2024
DATE OF JUDGMENT: -08.11.2024
Dr. S.K. Panigrahi, J.
1. Since common question of facts and law are involved in both the Writ Petitions mentioned hereinabove, the same were heard together and are being disposed of by this common judgment. However, this Court felt it Page 1 of 18 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 18-Nov-2024 19:08:04 apposite to deal the W.P.(C) No.31778 of 2011 as the leading case for proper adjudication of all these cases.
2. Through W.P.(C) No.31778 of 2011, the Petitioner(s) seek to contest the Office Order dated 17.11.2011, issued by the Assistant General Manager, HRD, Odisha Hydro Power Corporation Ltd., directing the recovery of an alleged excess amount from the salaries of Non-Executive Employees of the Hirakud Hydro Electric Power Project, Burla, and the Chipilima Hydro Electric Power Project (a unit of OHPC Ltd.). This recovery pertains to excess payments allegedly made due to higher grade pay on account of pay fixation in APS/ACP under the revised pay scale effective from 01.04.2005. The recovery is to be executed in 60 consecutive monthly installments from the monthly salary/pension of the concerned employees, starting in November 2011.
I. FACTUAL MATRIX OF THE CASE:
3. The brief facts of the case are as follows:
(i) While the petitioners are continuing as such the Orissa Hydro Power Corporation Ltd., Bhubaneswar (hereinafter "Corporation") issued an Office Order bearing No.OHPC-HRD-HQ-IRW-1-20/09/3161 dated 28.4.2009 where the benefit of Assured Career Progression ("ACP") were granted in favour of the Non- executive employees.
(ii) As per the clause 12 of the said Office Order it was pointed out that the said ACP is applicable to all the Non-executive employees / Workers upto the Non-executive-9 grade with effect from 01.04.2005 in three stages i.e., the 1 ACP after completion of 15 years, the 2nd ACP after completion of 25 years and the 3rd ACP after completion of 30 years of Page 2 of 18 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 18-Nov-2024 19:08:04 service, if they continue in one post/grade. Such benefit of ACP will be given only after screening of each and every case by the Screening Committee to be constituted by Units/Corporate Office, as the case may be, and all norms of promotion shall be taken into consideration for allowing ACP in different stages. The financial benefit to the extent of 3% of the Basic Pay plus Grade Pay will be added on availing ACP in different stages and the next increment will accrue after one year.
(iii) If the employee/worker has already availed both the 1st and the 2nd stage of Time Bound Advancement ("TBA") scale under the existing provisions, he/she will not be again entitled to the ACP in the revised pay. However, the 3rd ACP after completion of 30 years of service in one post/grade shall be applicable as stated above.
(iv) None of the petitioners have got promotion during their service tenure and most of them were at stagnation and for which the authorities have taken a decision to grant them the benefit of Assured Career Progression (ACP).
(v) The said Office Order dated 28.4.2009 was in pursuance to the bi-party settlement between the Management of the Corporation and the Employees on 25.4.2009 and the existing scale of pay of regular Non- executive employees of the Corporation have been revised w.e.f. 1.4.2005 of the said Office Order.
(vi) Based on the said Office Order the management has given the higher Grade Pay and TBA benefit w.e.f. 1.4.2005 and continued till 31.3.2011 and the amount was paid in favour of the petitioners in accordance with the approval of the Board of Directors w.e.f. 1.4.2005. Page 3 of 18 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 18-Nov-2024 19:08:04
(vii) While the matter stood thus, the Finance Department has issued a Circular to All the Heads of Departments clarifying the Orissa Revised Scale of Pay Rules, 2008 vide memo No.18409 dated 8.4.2010 and by virtue of which the Corporation has issued instruction on 4th May, 2010 to all the Units pointing out inter alia to take necessary action in pursuance to the clarification issued by the Finance Department on ORSP Rules, 2008.
(viii) Based on the clarification issued by the Finance Department the Management of the Corporation has taken a decision on 19.7.2011 and recommended to recover excess payment made from the salary of the concerned employees in monthly installments.
(ix) After the decision was taken by the Board, vide Office Order dated 17.11.2011 instruction has been issued for recovery of the amount from the salary of the Non-executive employees and in the said Office Order it has been pointed out that pursuant to the decision taken by the Board in its 108th meeting held on 20.09.2011, approval was accorded for recovery of excess amount made to the Non-executive employees on account of higher grade pay on fixation of pay in APS / ACP in the revised scale of pay on or after 01.04.2005 in 60 nos. of consecutive monthly installments from the monthly salary/pension of the concerned employees commencing from November, 2011. Hence, the present Writ Petition.
II. SUBMISSIONS ON BEHALF OF THE PETITIONERS:
4. Learned counsel for the Petitioners earnestly made the following submissions in support of his contentions:
Page 4 of 18 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 18-Nov-2024 19:08:04
(x) The authorities have granted the benefit taking into consideration various aspects and in this instant case the benefits have been granted in favour of the petitioners taking into consideration that they were not promoted during their service tenure and for which one Grade Pay has been added into their salary and the said decision has been taken in pursuance to the bi-party settlement arrived between the Management of the Corporation and the employees represented through their Federation/Association/Unions. It is relevant to mention that the bi-
party settlement is an agreement between the Management of the Corporation and the Employees. Hence, instruction issued by the Finance Department is not binding on them as the benefit has been granted in favour of the petitioners as per the bi-party settlement between the Management and the Employees. Since the Finance Department clarification is detrimental to the interest of the employees the authorities should not have made applicable against the petitioners who have already received the benefits by virtue of an agreement as per the bi-party settlement.
(xi) After receipt of the benefit, even the arrears the petitioners have spent the same and further they have also deposited their Income Tax dues accordingly. It was submitted that the excess payment was not on account of any misrepresentation or fraud on the part of the employees. Rather the payment has been made as per the bi-party agreement which might not have been approved by the Finance Department and for which the order of recovery is bad in law.
Page 5 of 18 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 18-Nov-2024 19:08:04
(xii) Such relief restraining recovery back of excess payment is necessary as an employee particularly one in the low rungs of service would spend whatever emoluments he receives for the upkeep of his family. If he receives excess for a long period he would spend it genuinely believing that he is entitled to it as any subsequent action to recover excess payment will cause undue hardship to him. But in this instant case the authorities have taken the decision to grant the benefit and for which there is no reason in directing for recovery
(xiii) The recovery amounts to punishment. In this instant case before the order of recovery was made the petitioner have never been given any opportunity to have their say. Rather unilaterally decision has been taken for recovery of the amount which has been paid in their favour continuously and in pursuance to a bi-party settlement arrived between the Management of the Corporation and the Employees represented by the Federation/Association/Union.
(i) The petitioners have submitted a representation on 5.4.2011 to the O.P. No.3 requesting not to recover the Grade pay attached to next higher pay of the employees on implementation of 6th Pay Commission. However, because of non-consideration of their representation again they have submitted their representation on 4.11.2011 to the OP No.4 which is pending without any consideration.
III. SUBMISSIONS ON BEHALF OF THE OPPOSITE PARTIES:
5. Per contra, learned counsel for the Opposite Parties earnestly made the following submissions in support of his contentions: Page 6 of 18 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 18-Nov-2024 19:08:04
(i). The revision of pay has been extended to all the Non-Executive employees working in Odisha Hydro Power Corporation Ltd. (for short OHPC Ltd.) in every 5(five) years. The last revision of pay has been extended to the Non-Executive employees of OHPC by virtue of the bipartite settlement dated 25.4.2009 signed between the Unions & Federations representing the Non-executive employees / Workmen including the petitioners and the Management of OHPC Ltd. (Opp.
Parties).
(ii). At Para 11 of the said settlement, it has been categorically agreed upon between both the parties that the Assured Career Progression (ACP) benefit shall be extended to the concerned Non-Executive employees as per the Government principle. In accordance to the said bi-partite settlement, the wages of all the Non-Executive employees have been revised with effect from 01.04.2005 vide OHPC Office Order No.3161 dated 28.04.2009.
(iii). In Clause-17 of the said Office Order, it has also been categorically informed to all the Non-Executive Employees to submit an undertaking in the prescribed format to the extent that any excess amount so paid / received by the concerned employee shall be recovered from them. All the concerned non-executive employees have also submitted the undertakings to that effect
(iv). As per Clause-12 of the Office Order No.3161 dated 28.04.2009, the Assured Career Progression (for short ACP) benefits shall be extended to the Non-Executive employees / workers upto NE-9 grade with effect from 01.04.2005 in three stages i.e. the 1st ACP after completion of 15 Page 7 of 18 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 18-Nov-2024 19:08:04 years, the 2nd ACP after completion of 25 years and the 3rd ACP after completion of 30 years of service if they continue in one post/ grade. Such benefits can only be extended after due screening by the screening Committee. The financial benefit to the extent of 3% of the Basic Pay plus Grade Pay will be added on availing ACP in different stages and the next increment will accrue after one year.
(v). Sccordingly, the concerned eligible non-executive employees were allowed First, Second and Third Assured Career Progression (ACP) benefits on completion of 15 years, 25 years, and 30 years in a post/grade respectively.
(vi). In absence of clear cut guidelines regarding financial benefits in fixation of pay in Assured Career Progression (ACP), Fixation was made extending one increment equivalent to the extent of 3% of Basic Pay plus existing grade pay. Therefore, next higher grade pay was allowed from the date of fixation of such ACP as per the previous practice of Time Bound Advancement Pay Scale (in short TBAPS) i.e. one increment in existing scale and the resultant figure shall be fitted in next higher scale as per Rule 74(b) of Orissa Service Code (OSC). After receipt of the clarification vide Clause-12 of Finance Department, Government of Odisha vide its Memo No. 18409 (255)/F dated 8.4.2010, orders were issued to all concerned to recover the said excess amount paid on account of higher grade pay.
(vii). At Clause-12 of the said clarification letter of Government in Finance Dept., it has been clarified that there shall be no change of grade pay on availing ACP by an employee and the employee concerned shall Page 8 of 18 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 18-Nov-2024 19:08:04 continue in the existing grade pay. Based on the above principles, the OHPC Ltd. (Opp. Parties) has also circulated the related clarification on above matter vide its Letter No.6402 dated 22.09.2010.
(viii). In the said letter, the Corporation has also intimated all concerned for recovery of the excess amount disbursed on account of higher grade pay extended to non-executive employees in ACP.
(ix). In this connection, it is submitted that the Petitioners have not challenged the Memo No.18409 (255)/F dated 08.04.2010 of the Government of Odisha in Finance Department wherein clarification has been issued by the Government in regard to the principle for sanction of ACP benefits to the employees on fixation of their pay in revised scale of pay. The Corporation has only followed the above principle as clarified by the Government.
(x). The employees of different units have represented for non- recovery of excess amount paid to them. More importantly, the Progressive Employees union and also the Rengali Power Project Workers Union, Rengali representing the Non-executive employees working under the Corporation represented with a request not to recover such excess amount paid to the employees as per the settlement. The matter has been discussed with the said union on 20.6.2011 by the management of OHPC Ltd.
(xi). The said minutes of discussion was examined by different forums of OHPC and finally placed before the 108th Meeting of Board of Directors of OHPC held on 20.9.2011. In the said meeting the Board has finally Page 9 of 18 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 18-Nov-2024 19:08:04 decided to recover the excess amount paid to the concerned employees on account of grant of ACP.
(xii). Accordingly, the Corporation has issued the Office Order vide its order No.8572 dated 17.11.2011 for information of all concerned for recovery of excess amount made to the Non-executive employees on account of higher grade pay on fixation of pay in ACP in the revised scale of pay on or after 01.04.2005 in 60 nos. of consecutive monthly installments from the monthly salary/pension of the concerned employees commencing from November, 2011 etc.
(xiii). The Assured Career Progression (ACP) benefits (i.e. 1st, 2nd & 3rd ACP) are only extended to the concerned employees those who are continuing in one post/ grade for 15 years, 25 years & 30 years respectively. Such benefits are only extended to the concerned eligible employees who have not been promoted to next higher post and continuing in the existing post/grade for longer years as stated above.
(xiv). Pending receipt of the clarification from Government, the Management of OHPC has allowed higher grade pay i.e. Time Bound Advancement (TBA/ACP) benefit to the concerned Non-executive employees with effect from 01.04.2005. After receipt of the clarification of Government in regard to interpretation of rules, all the concerned eligible Non- executive employees have been allowed existing grade pay instead of higher grade pay on fixation of their pay in ACP as per the decision of the Board of Directors of OHPC. Hence, the submission made by the petitioners in this regard is misconceived.
Page 10 of 18 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 18-Nov-2024 19:08:04
(xv). The Government in Finance Department has issued a circular vide Memo No.18409 dated 08.04.2010 clarifying the principle in Odisha Revised Pay Rules, 2008 which includes principles for sanction of ACP benefits to its employees. The Clause-11 & 12 of the said Circular clearly indicates about the principle to be followed for sanction of ACP benefits to the employees. Accordingly, the Corporation has issued instruction to all its Units on 22.09.2010 vide its Letter No.6402 dated 22.09.2010. The opposite parties have only followed the principle as clarified by the Government in this regard (xvi). On recovery of the excess amount, the petitioner can accordingly submit their income tax statement and deposit the tax amount, if any, after adjustment earlier tax already said to have been paid by them on account of excess payment, with the Income Tax Department. The excess amount were paid pending receipt of the clarification from Government and after receipt of the Government clarification and in terms of bi-partite settlement, the ACP benefit has been granted to concerned eligible employees and order has been issued for recovery of excess amount from the employees in easy installments. Hence, the allegation raised on this score is hereby denied.
IV. COURT'S REASONING AND ANALYSIS:
6. Heard learned advocates appearing for the sides and perused through the material on record.
7. The Supreme Court has established through multiple rulings that excess payments made to an employee, absent any fraudulent conduct or misrepresentation on their part, and where such payments result from Page 11 of 18 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 18-Nov-2024 19:08:04 the employer's misapplication of pay calculations or misinterpretation of a rule later determined to be incorrect, are generally protected from recovery.
8. In Sahib Ram v. State of Haryana and Others,1 the Apex Court 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 the part of the employees. It was held thus :
"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."
9. In yet another case, in Col. B.J. Akkara (Retd.) v. Government of India and Others2 this Court considered an identical question as under:
"27. The last question to be considered is whether relief should be granted against the recovery of the excess payments made 1 1995 Supp (1) SCC 18 2 (2006) 11 SCC 709 Page 12 of 18 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 18-Nov-2024 19:08:04 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 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.
Page 13 of 18 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 18-Nov-2024 19:08:04
29. On the same principle, pensioners can also seek a direction 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."
10. First and foremost, it is pertinent to note, that the Apex Court in its judgment in Syed Abdul Qadir v. State of Bihar3 recognized that the issue of recovery revolved on the action being iniquitous. Dealing with the subject of the action being iniquitous, it was sought to be concluded, that when the excess unauthorized payment is detected within a short period of time, it would be open for the employer to recover the same. Conversely, if the payment had been made for a long duration of time, it would be iniquitous to make any recovery. Interference because an action is iniquitous, must really be perceived as, interference because the action is arbitrary. It was held thus:
"59. Undoubtedly, the excess amount that has been paid to the appellant teachers was not because of any misrepresentation or 3 (2009) 3 SCC 475 Page 14 of 18 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 18-Nov-2024 19:08:04 fraud on their part and the appellants also had no knowledge that the amount that was being paid to them was more than what they were entitled to. It would not be out of place to mention here that the Finance Department had, in its counter-affidavit, admitted that it was a bona fide mistake on their part.
The excess payment made was the result of wrong interpretation of the Rule that was applicable to them, for which the appellants cannot be held responsible. Rather, the whole confusion was because of inaction, negligence and carelessness of the officials concerned of the Government of Bihar. Learned counsel appearing on behalf of the appellant teachers submitted that majority of the beneficiaries have either retired or are on the verge of it. Keeping in view the peculiar facts and circumstances of the case at hand and to avoid any hardship to the appellant teachers, we are of the view that no recovery of the amount that has been paid in excess to the appellant teachers should be made."
11. Similarly, in State of Punjab and Others v. Rafiq Masih (White Washer) and Others4 wherein this 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 4 (2015) 4 SCC 334 Page 15 of 18 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 18-Nov-2024 19:08:04 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 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.
xxx xxx xxx 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."Page 16 of 18 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 18-Nov-2024 19:08:04
12. In a landmark judgment on the issue in Thomas Daniel v. State of Kerala5 the Supreme Court reiterated that if the excess amount was not paid on account of any 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. This relief against the recovery is granted not because of any right of the employees but in equity, exercising judicial discretion to provide relief to the employees from the hardship that will be caused if the recovery is ordered. This Court has further held that if in a given case, it is proved that an employee had knowledge that the payment received was in excess of what was due or wrongly paid, or in cases where error is detected or corrected within a short time of wrong payment, the matter being in the realm of judicial discretion, the courts may on the facts and circumstances of any particular case order for recovery of amount paid in excess.
13. In the present case, it is uncontested that the appellant did not receive excess payments as a result of any misrepresentation or fraudulent conduct. The appellant was granted a higher Grade Pay and the Time Bound Advancement benefit beginning on 01.04.2005, with payments continuing until 31.03.2011, in accordance with approval from the Board of Directors. The respondents assert that the overpayment occurred due to the absence of definitive guidelines on financial benefits under the 5 [2022] 4 S.C.R. 606 Page 17 of 18 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 18-Nov-2024 19:08:04 Assured Career Progression (ACP) scheme, resulting in the grant of one increment at 3% of the Basic Pay plus the existing grade pay.
14. It is reiterated that the petitioners had no knowledge of receiving payments beyond their entitlement and had no involvement in calculating or receiving this increment. The petitioners, relying on a Government Order, mistakenly granted this increment due to administrative oversight, an error for which the respondent cannot be held responsible. Furthermore, the recovery order was issued on 17.11.2011; more than six years after the initial salary adjustments on 01.04.2005.
V. CONCLUSION:
15. Having regard to the above, this Court of the view that an attempt to recover the said increments after passage of six years of the calculation mistake of increment distribution is unjustified.
16. This Court clarifies, however, that Opposite Parties retain the legal right to correct the Petitioners' salary prospectively, effective from 17.11.2011, and may recover any excess payments made from that date onward, given that the Petitioners were formally notified that the salary received exceeded the rightful amount.
17. In light of the foregoing, both the Writ Petitions are allowed and disposed of in terms of the aforesaid observations.
(Dr. S.K. Panigrahi) Judge Orissa High Court, Cuttack, Dated the 8th Nov., 2024/ Page 18 of 18