Allahabad High Court
Shiv Swaroop Trivedi S/O Late Deen Dayal ... vs State Of U.P. Thru Secy. Gramya Vikas & ... on 20 February, 2013
Author: Anil Kumar
Bench: Anil Kumar
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH RESERVED Court No. - 18 Case :- SERVICE SINGLE No. - 124 of 2010 Petitioner :- Shiv Swaroop Trivedi S/O Late Deen Dayal Trivedi Respondent :- State Of U.P. Thru Secy. Gramya Vikas & Ors. Petitioner Counsel :- A.P. Singh Vatsa,Vashu Deo Mishra,Vinod Kumar Verma Respondent Counsel :- C.S.C. And Case :- SERVICE SINGLE No. - 1686 of 2010 Petitioner :- Shiv Swaroop Trivedi S/O Late Deen Dayal Trivedi Respondent :- State Of U.P. Thru Secretary Gramya Vikas Petitioner Counsel :- A.P. Singh Vatsa Respondent Counsel :- C.S.C. Hon'ble Anil Kumar,J.
Heard Shri Vashu Deo Mishra, learned counsel for the petitioner, Shri Abhinav Narain Trivedi, learned Addl. Chief Standing Counsel and perused the record.
Shiv Swaroop Trivedi/petitioner was appointed on 12.11.1968 on the post of Junior Clerk in the department of Gramya Vikas, State of U.P. and was posted at Unnao. While he was working in the department a new pay scale was given to him as per the Government Order dated 11.8.1983 vide G.O. No.Ve.Aa.-1-1802-Dus-34-(M)-83. After completing 40 years of successfully services, petitioner retired on 28.2.2009 from service after attaining the age of superannuation from the post of Assistant Accountant.
While he was enjoining retiral life, the impugned order dated 28.8.2009 (Annexure No.1) was passed by the opposite party no.4/District Development Officer, Hardoi thereby directing to recover the amount along with interest as mentioned therein as the same had been paid to him in excess as he was not entitled for promotional scale given to him in view of the Government Order dated 11.8.1983.
Aggrieved by the same, petitioner made a representation dated 2.11.2009 before the opposite part no.3/Chief Development Officer, Hardoi, but no heed was paid. Hence, he filed Writ Petition No.124 (SS) of 2010 before this Court.
During the pendency of the present writ petition, vide order dated 28.1.2010 the District Development Officer, Hardoi rejected the representation of the petitioner, as a result of which the post retiral dues of the petitioner including his General provident fund etc. have been declined to be paid to him. So, petitioner filed Writ Petition No.1686 (SS) of 2010.
Thereafter, Writ Petition No.1686 (SS) of 2010 and Writ Petition No.124 (SS) of 2010 were connected together and were disposed of by order dated 27.4.2010, relevant portion quoted herein below:-
"From the record, it alleges that some excess payment was made to the petitioner by fixing wrong pay, as appears from the impugned order dated 28.01.2010. The excess payment will have to be recovered by the opposite parties. But how much this is a question of accounting. At this stage, learned counsel for the petitioner is not ready with the computation of arrears of excess payment. So, the same cannot be verified.
In the circumstances, I direct the petitioner to approach the respondent no.3 i.e. Chief Development Officer, Hardoi who with the help of opposite parties no. 4 & 5 verified the excess payment and computation etc. by providing the opportunity to the petitioner. The excess payment, if any, will have to be recovered by way of adjustment from the retiral dues of the petitioner. Thereafter, the entire retiral dues will have to be released in favour of the petitioner. This exercise will have to be completed within four weeks after receiving the certified copy of this order.
With the aforesaid direction, both the writ petitions are disposed of."
Aggrieved by the said order, petitioner filed a Special Appeal No.787 of 2010, disposed of by order dated 4.1.2012, the relevant portion is reproduced herein below:-
"Counsel for the appellant has submitted that in view of catena of judgments of this Court as well as the Apex Court. Since there was no misrepresentation by the appellant in the matter of fixation of his pay, even if wrong pay was fixed by the department on its own and the salary was paid accordingly, the excess amount so paid could not be ordered to be recovered, though the correct fixation could have been done and the consequential retirement benefits could have been awarded as per the correct fixation.
We have gone through the record and we find that the learned Single Judge has not touched the merits of the claim of the appellant at all and rather has presumed that since some excess amount has been paid, therefore, it has to be refunded. He has only directed calculation of the aforesaid amount and refund thereof.
We are of considered view that since the order does not bear any reason or finding as to whether the appellant was responsible for refund of the excess amount or not, the order cannot be sustained. It is hereby set aside and the matter is directed to be listed before the learned Single Judge having jurisdiction to decide the claim of the appellant on merit afresh.
Counter affidavit may be filed by the State within three weeks.
List the writ petition for orders/hearing in the month of February, 2012.
In the meantime, if any adjustment is made that shall be subject to the final orders passed in the writ petition.
The special appeal stands disposed of."
In view of the abovesaid facts, Writ Petition Nos.124 (SS) of 2010 and 1686 (SS) of 2010 again came up for hearing before this Court.
After hearing learned counsel for the parties and going through the records, the position which emerges out is that while petitioner was in service, new pay scale/promotional scale was given to him as per the Government Order dated 11.8.1983 which he received till he attain the age of superannuation.
Further, the said pay scale/promotional scale given to him voluntarily by the employer without there being any fraud or misrepresentation on his part sought to be recovered, so question arises in the present case that if the said benefit is being given to him by an employer voluntary in bona fide manner in view of the Government Order dated 11.8.1983 can be recovered from the petitioner subsequently merely on the ground that some mistake of interpretation of rules have been committed by the employer in regard to payment of the same, for which the petitioner could not be held responsible.
Answer to the said question find place in the judgment of the Hon'ble Supreme Court in the case of Chandi Prasad Uniyal & Ors. vs. State of Uttarakhand & Ors. 2012 (3) LBESR 692 (SC) wherein after considering the earlier judgment passed on the point in issue in the case of Shyam Babu Verma v Union of India (1994) 2 SCC 521, Sahib Ram v. State of Haryana 1995 (1) LBESR 206 (SC), Col. B. J. Akkara (Retd.) v. Government of India & Ors. (2006) 11 SCC 709 and Syed Abdul Qadir & Ors. v. State of Bihar & Ors. (2009) 3 SCC 475 in paragraph nos.7 to 18 it has been held as under:-
" Para 7 - Appellants herein are some of the teachers named in that letter; similar communications had gone to few other institutions, where appellants work.
Para 8 - We may point out indisputedly, the appellants 1 and 2 herein were not in the pay scale of Rs.4,250-6,400 as such they could not have got the revised pay scale of Rs.10,000-15,200/- w.e.f. 01.07.2001. Only if they were getting pay scale of Rs.8000-13,500/- on 01.01.1996, they would have been entitled to be placed in the pay scale of 10,000-15,200 as on 01.07.2001. Further, appellants 3 to 5 were working as Assistant Teachers and drawing in pay scale of Rs.3,600-5,350/- as on 01.01.1996 and were placed in the pay scale of Rs.5,500-9,000 as on 01.07.2001. Further, it was noticed that none of the appellants were working as principals and were never placed in the pay scale of 8,000-15,500 as on 01.01.1996 to get the benefit of the pay scale of 10,000-15,200 as on 01.07.2001. We also find only few persons like the appellants have been getting higher pay scale in the district of Haridwar w.e.f. 01.07.2001 and similarly situated persons in the rest of Uttarakhand are getting the same pay scale of Rs.10,000- 15,200 only from 11.12.2007 and it was to rectify this anomaly, the District Education Officer, Haridwar passed the order dated 24.10.2009.
Para 9 - We may also indicate that when the revised pay scale/pay fixation was fixed on the basis of the 5th Central Pay Scale, a condition was superimposed which reads as follows:
"In the condition of irregular/wrong pay fixation, the institution shall be responsible for recovery of the amount received in excess from the salary/pension."
Para 10 - The appellants are further bound by that condition as well. The facts, mentioned hereinabove, would clearly demonstrate that the excess salary was paid due to irregular/wrong pay fixation by the concerned District Education Officer. The question is whether the appellants can retain the amount received on the basis of irregular/wrong pay fixation in the absence of any misrepresentation or fraud on their part, as contended.
Para 11 - We are of the considered view, after going through various judgments cited at the bar, that this court has not laid down any principle of law that only if there is misrepresentation or fraud on the part of the recipients of the money in getting the excess pay, the amount paid due to irregular/wrong fixation of pay be recovered.
Para 12 - Shyam Babu Verma case (supra) was a three-Judge Bench judgment, in that case the higher pay scale was erroneously paid in the year 1973, the same was sought to be recovered in the year 1984 after a period of eleven years. The court felt that the sudden deduction of the pay scale from Rs.330-560 to Rs.330-480 after several years of implementation of said pay scale had not only affected financially but even the seniority of the petitioners. Under such circumstance, this Court had taken the view that it would not be just and proper to recover any excess amount paid.
Para 13 - In Sahib Ram case (supra), a two-Judge Bench of this Court noticed that the appellants therein did not possess the required educational qualification and consequently would not be entitled to the relaxation but having granted the relaxation and having paid the salary on the revised scales, it was ordered that the excess payment should not be recovered applying the principle of equal pay for equal work. In our view, this judgment is inapplicable to the facts of this case. In Yogeshwar Prasad case (supra), a two-Judge Bench of this Court after referring to the above mentioned judgments took the view that the grant of higher pay could not be recovered unless it was a case of misrepresentation or fraud. On facts, neither misrepresentation nor fraud could be attributed to appellants therein and hence, restrained the recovery of excess amount paid.
Para 14 - We may in this respect refer to the judgment of two-Judge Bench of this Court in Col. B.J. Akkara (retd.) case (supra) where this Court after referring to Shyam Babu Verma case, Sahib Ram case (supra) and few other decisions held as follows:
"Such relief, restraining recovery back 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."
Para 15 - Later, a three-Judge Bench in Syed Abdul Qadir case (supra) after referring to Shyam Babu Verma, Col. B.J. Akkara (retd.) etc. restrained the department from recovery of excess amount paid, but held as follows:
"Undoubtedly, the excess amount that has been paid to the appellants- teachers was not because of any misrepresentation or 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 appellants-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 appellants-teachers, we are of the view that no recovery of the amount that has been paid in excess to the appellants-teachers should be made.
Para 16 - We may point out that in Syed Abdul Qadir case such a direction was given keeping in view of the peculiar facts and circumstances of that case since the beneficiaries had either retired or were on the verge of retirement and so as to avoid any hardship to them.
Para 17 - We are not convinced that this Court in various judgments referred to hereinbefore has laid down any proposition of law that only if the State or its officials establish that there was misrepresentation or fraud on the part of the recipients of the excess pay, then only the amount paid could be recovered. On the other hand, most of the cases referred to hereinbefore turned on the peculiar facts and circumstances of those cases either because the recipients had retired or on the verge of retirement or were occupying lower posts in the administrative hierarchy.
Para 18 - We are concerned with the excess payment of public money which is often described as "tax payers money" which belongs neither to the officers who have effected over-payment nor that of the recipients. We fail to see why the concept of fraud or misrepresentation is being brought in such situations. Question to be asked is whether excess money has been paid or not may be due to a bona fide mistake. Possibly, effecting excess payment of public money by Government officers, may be due to various reasons like negligence, carelessness, collusion, favouritism etc. because money in such situation does not belong to the payer or the payee. Situations may also arise where both the payer and the payee are at fault, then the mistake is mutual. Payments are being effected in many situations without any authority of law and payments have been received by the recipients also without any authority of law. Any amount paid/received without authority of law can always be recovered barring few exceptions of extreme hardships but not as a matter of right, in such situations law implies an obligation on the payee to repay the money, otherwise it would amount to unjust enrichment."
Accordingly, in view of the said judgment passed by Hon'ble the Supreme Court in the case of Chandi Prasad Uniyal (supra), the law on the point can be summarized that if salary or wages hav been paid to an employee by an employer voluntary in bona fide manner without there being any element of fraud or misrepresentation on his part can be recovered from the employee but the same cannot be recovered in two circumstances (a) if an employee has retired (b) on the verge of retirement .
Besides above, the next question which is to be considered by the Court in the the present case is that if an employee does not fall in the two exceptional categories (as mentioned above) can excess amount paid be recovered from the employee merely on the ground that some mistake in regard to the interpretation of the rules might have been committed by the employer and that too without affording any opportunity of being heard.
In order to decide the said controversy on one hand it should be kept in mind that an average employee is considered to have no saving capacity except through forced savings, such as, contribution to Provident Fund or premium towards Life Insurance etc. He is expected to consume his pay packet in meeting the daily needs for himself and his family. If by mistake the employer makes over payments and such mistake is not induced by any representation from the employee can he be held guilty, thus liable to pay back the amount.
However, on the other hand, there is a theory of "Unjust Enrichment" as per the said theory where the employee has received payments which is not his entitlement, such receipt of excess payments implies a corresponding duty in the recipient to refund. In case a demand is made for refund/recovery by the authority which made the payment under influence of any mistake or misrepresentation or undue influence, the employee is by law bound to make the refund.
In Thomas Abraham v. National Tyre & Rubber Co. (AIR 1974 SC 602), Hon'ble the Supreme Court held that it is an established principle in common law that an action for recovery of money unduly received is a practical and useful instrument to prevent unjust enrichment. The law implies an obligation to repay the money which is an unjust benefit. So, it may be pleaded on behalf of the authorities that the employee cannot retain any monies paid to him by mistake or erroneous considerations.
Unjust Enrichment is provided under Section 72 of the Indian Contract Act 1872. The Section runs:-
"72 Liability of person to whom money is paid, or thing delivered, by mistake or under coercion - A person to whom money has been paid, or anything delivered, by mistake or under coercion, must repay or return it.
Illustrations
(a) A and B jointly owe 100 rupees to C. A alone pays the amount to C, and B, not knowing this fact, pays 100 rupees over again to C. C. is bound to repay the amount to B.
(b) A railway company refuses to deliver up certain goods to the consignee except upon the payment of an illegal charge for carriage. The consignee pays the sum charged in order to obtain the goods. He is entitled to recover so much of the charges as was illegally excessive."
The ingredients of the principle of unjust enrichment has been enumerated while interpreting the theory of Unjust Enrichment by Hon'ble the Apex Court in Mahavir Kishore v. State of M.P. (AIR 1990 SC 313) held as under:
First, that the defendant has been 'enriched' by the receipt of a 'benefit';
secondly, that this enrichment is 'at the expense of the plaintiff' ; and Thirdly, that the retention of the enrichment is unjust.
Enrichment may take the form of direct advantage to the recipient' s wealth such as by the receipt of money or indirect benefit, for instance, where inevitable expense has been saved.
Further an order passed for recovery of an amount is purely an administrative order. But even so, justice requires that notice to the employee can not be dispensed with prior to the recovery of the same. As no one can be deny that an order passed would vitally affects the employee from whom the recovery is made on the ground that he is not entitled for the same on the arounds of misinterpretation of the rules etc. due to mistake on the part of the employer for which employee could not be responsible. This aspect, by itself without more, should convince us all that it would be not only just but also necessary that such employee should be given opportunity of hearing before order of recovery of the excess amount which initially was wrongly paid to him without fraud or misrepresentation on his part by the employer. Because it is a basic principle of our jurisprudence, which requires prior notice to a person wherever decisions are taken tending to affect vitally. This principle has been held to govern the action not only for courts of law, but also tribunals and administrative authorities etc., even in the absence of express provision in the enacted law concerning notice to the affected party. As by all standards, rules of natural justice are great assurances of justice and fairness. There are certain basic values which a man has cherished throughout the ages, they can be described as natural law or divine law. A man, as a reasonable being, must apply this part of law to human affairs.
Apart from philosphical aspect, the concept of natural justice has made invaluable contribution to the development of positive law. It helped to transform the rigidity of jus civile of the Romans into more equitable system based on the theory of jus gentinum. It inspired the movement for codification of law in order to formulate ideas derived from the concept of natural law into detailed rules.
The object underlying the rules of natural justice is to protect fundamental liberties and civil and political rights. They, therefore, should be interpreted liberally so that they may conform, grow and tailor to serve public interest and respond to the demands of an evolving society. The principles of natural justice are essential to the framework of Indian legal system.
Generally, no provision is found in any statute requiring observance of the principles of natural justice by adjudicating authorities. The question then arises whether the adjudicating authority is bound to follow the principles of natural justice.
Lord Russell in the case of Fairmount Investment Ltd. v. Secy. To State for Environment (1976) I WLR 1255 held that it is to be implied unless the contrary appears, that Parliament does not authorize by the Act the exercise of powers in breach of the principles of natural justice, and that Parliament does by the Act require, in the particular procedures, compliance with those principles.
Lord Denning in the case of R. v. Gaming Board for Great Britain, (1970) 2 QB 417 observed that at one time it was said that the principles of natural justice applied only to judicial proceedings and not to administrative proceedings, but "that heresy was scotched". So the principles of natural justice are applicable to almost the whole range of administrative powers. The presumption is that it will always apply, however silent about it the statute may be.
Further in the case of Breen v. Amalgamated Engg. Union (I971) 2 QB I75 Lord Denning observed that a statutory body, which is entrusted by statute with a discretion, must act fairly. It does not matter whether its functions are described as judicial or quasi- judicial on the one hand, or as administrative on the other hand.
In the historic case of A.K. Kraipak v. Union of India (1969) 2 SCC 262 Hon'ble the Supreme Court held that the aim of the rules of natural justice is to secure justice or to put it negatively to prevent miscarriage of justice. These rules can operate only in areas not covered by any law validly made. In other words they do not supplant the law of the land but supplement it.
In Maneka Gandhi v. Union of India (1978) I SCC 248 it has been held that it is well established that even where there is no specific provision in a statute or rules made thereunder for showing cause against action proposed to be taken against an individual, which affects the rights of that individual the duty to give reasonable opportunity to be heard will be implied from the nature of the functions to be performed by the authority which has the power to take punitive or damaging actions.
In K.I. Shephard v. Union of India (1987) 4 SCC 431 Hon'ble the Apex Court held that formerly the presumption had been that there was no obligation to give a hearing unless the statute itself indicated such an obligation; now the presumption is that there is such an obligation unless the statute clearly excludes it, notwithstanding the vesting of a power, in subjective terms.
In the words of Hon'ble Mr. Justice Krishna Iyer, in the case of Mohinder Singh Gill v. Chief Election Commr. AIR 1978 SC 851 held that "what is a civil consequence, let us ask ourselves, by passing verbal boobytraps? 'Civil consequences' undoubtedly cover infraction of not merely property or personal rights but of civil liberties, material deprivations and non-pecuniary damages."
Thus, principles of natural justice are applicable to almost the whole range of administrative powers. The presumption is that it will always apply, however silent about it the statute may be because if we desire a society governed by the rule of law. (See Board of High School and Intermediate Education v. Chitra Srivastava (I970) I SCC I2I).
Applying this fundamental principles of natural justice to a wide variety of proceedings in cases classified by academic writers under the head "Administrative law". And the learned Judges have had no hesitation in setting aside orders passed in the exercise of quasi-judicial power, wherever there was want of notice to the party affected. Recent trends in court-decisions show that this principle of natural justice must be applied even to purely administrative decision-making if that should affect an individual employee.
In the case of Shiv Prakash Richaria vs. State of U.P. and Ors. (2008) 3 UPLBEC 2517 this court while quashing an order of recovery against an employee who has been paid excess amount voluntarily by the employer without there being any element of fraud or misrepresentation on his part held as under:-
"Another ground on which the impugned order is liable to be set aside is that no opportunity of hearing was afforded by the respondents to the petitioner prior to passing of the impugned order."
A Division Bench of this Court in the case of Harish Chandra Srivastava vs. State of Uttar Pradesh and Ors. (1996) 3 UPLBEC 1340 while quashing an order of recovery of an excess amount paid to an employee without any fault on his part in paragraph no.19, (the relevant portion quoted) has held as under:-
"Para 19- The order impugned to this writ petition is, therefore, liable to be quashed not only on the ground of want of affording reasonable opportunity of being heard to the petitioner but also on the ground that the petitioner cannot be held responsible for securing promotion on the higher scale of pay by misleading the Department and therefore the payment of salary cannot be recoverd."
In the case of Awadh Nath Tripathi vs. Chief Development Officer, Sant Kabir Nagar and Ors. 2005 (23) LCD 177 after taking into consideration the law as laid down by Hon'ble Supreme Court in the case of Bihar State Electricity Board and another v. Vijay Bahadur and another (2002) 10 SCC 99, and by this Court in the case of Bindeshwari Sahai Srivastava v. Chief Engineer, Irrigation Department, Lucknow and others 1996 AWC 947 and B.N.Singh v. State of U.P. 1979 ALJ 184 it has been held that if wages have been paid to an employee by an employer voluntarily in a bona fide manner without there being any element of fault or mis-representation on the part of the employee, subsequently the same cannot be recovered by the employer on the ground that the same has been wrongly paid to the employee, without affording any opportunity of hearing to him.
In the case of Bhagwan Shukla, v. Union of India and others AIR 1994 Supreme Court 2480 wherein paragraph no.3 held as under:-
"We have heard learned counsel for the parties. That the petitioner's basic payhad been fixed since 1970 at Rs.190/- p.m. is not disputed. There is also no dispute that the basic pay of the appellant was reduced to Rs.181/- p.m. from Rs.190/- p.m. in 1991 retrospectively w.e.f. 18-12-1970. the appellant has obviously been visited with civil consequence but he had been granted no opportunity to show cause against the reduction of his basic pay. He was not even put on notice before his pay was reduced by the department and the order came to be made behind his back without following any procedure known to law. There, has, thus been a flagrant violation of the principles of natural justice and the appellant has been made to suffer huge financial loss without being hears. Fair play in action warrants that no such order which has the effect of an employee suffering civil consequence should be passed without putting the concerned to notice and giving him a hearing in the matter."
Thus, in the light of the abovesaid facts, if an employee has been paid excess amount voluntarily by the employer without there being any fault or misrepresentation on his part and he does not fall in the categories of employee as given in the case of Chandi Prasad Uniyal (supra) from whom the said amount can not be recovered then from such employee the same can be recovered but before doing so he may be given an opportunity of hearing to put forward his case/defence.
In the present case, promotional scale has been given to the petitioner in pursuance to the Government Order dated 11.8.1983 by his employer voluntary in bona fide manner without there being any element of fraud on his part subsequently cannot be recovered from him when he is retired from service after attaining the age of superannuation on the ground that same has wrongly been given to him by the employer because his case comes within the ambit and scope of the category of those employee from whom if the excess amount paid cannot be recovered as mentioned in the case of Chandi Prasad Uniyal (supra).
For the foregoing reasons, the impugned order dated 28.8.2009 (Annexure No.1) passed by the opposite party no.4/District Development Officer, Hardoi in Writ Petition No.124 (SS) of 2010 as well as order dated 28.1.2010 passed by District Development Officer, Hardoi in Writ Petition No.1686 (SS) of 2010 are set aside. Furhter, if any amount has been recovered from the petitioner in pursuance to the impugned orders under challenge in the present writ petition, the same shall be refund to him by the official respondent and they are also directed to release all the post retiral dues to the petitioner for which he is entitled but withheld by themt in pursuance to the impugned orders, the said exercise shall be done within a period of four weeks from the date of receiving a certified copy of this order .
With the above observations, both writ petitions are allowed.
Order Date :- 20.2.2013 Mahesh