Gujarat High Court
Shantaben vs State on 29 August, 2011
Author: H.K.Rathod
Bench: H.K.Rathod
Gujarat High Court Case Information System
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SCA/12278/2011 15/ 15 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL
CIVIL APPLICATION No. 12278 of 2011
With
SPECIAL
CIVIL APPLICATION No. 12279 of 2011
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SHANTABEN
U PANDYA - Petitioner(s)
Versus
STATE
OF GUJARAT & 2 - Respondent(s)
=========================================================
Appearance
:
MR
SHIVANG M SHAH for
Petitioner(s) : 1,
MR MAULIK NANAVATI AGP for Respondent(s) :
1,
None for Respondent(s) : 2 -
3.
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CORAM
:
HONOURABLE
MR.JUSTICE H.K.RATHOD
Date
: 27/08/2011
ORAL
ORDER
Heard learned advocate Mr. SM Shah on behalf of petitioners in both petitions and learned AGP Mr. Maulik Nanavati appearing for respondent in each petition.
In each petition, order passed by District Primary Education Officer, District Panchayat, Bhuj-Kutchh has been challenged wherein recovery has been effected from pension amount by respondents based on audit objection. All these petitioners were working with District Panchayat as primary teacher and have retired from service.
Learned Advocate Mr. Shah for petitioners has raised contention that this order of recovery has been issued by respondent authority without giving any opportunity of hearing to petitioners and without disclosing what was the audit objection raised by audit department and without supplying any details from audit objection and, therefore, this order is violative of basic principles of natural justice. He also raised contention that this amount of leave encashment which has been received by petitioners from respondents, for that, there is no fraud or representation is alleged, or committed by petitioners and, therefore, according to contention raised by learned Advocate Mr. SM Shah for petitioners, this order which has been issued by respondent authority must be set aside.
Learned Advocate Mr. Shah has also raised contention on merits relying upon decision of this Court given in Special Civil Application No. 6972 of 2010 decided on 17.8.2010 page 19 and another decision page 26 in Special Civil Application No. 3713 of 2009 dated 25.6.2009.
Mr. Maulik Nanavati, Learned Asstt. Government Pleader has submitted that this order of recovery has been issued by respondent authority against petitioners challenged in these petitions on the basis of audit objection raised by department and that amount was paid in excess and therefore, respondents are entitled to recover said amount from pension amount of petitioners.
I have considered submissions made by both learned advocates. I have also perused order of recovery passed by respondent authority against petitioner in each petition. Order of recovery has been passed on the basis of, considering audit objection but, before that, undisputedly from record, no reasonable opportunity has been given to petitioner and what was the audit objection raised by audit department, even that objection has also not been supplied to petitioners. Therefore, in such circumstances, before passing any order having adverse effect or civil consequences, it is necessary for respondent authority to give reasonable opportunity of hearing to concerned employee which has not been given to petitioners in these petitions by respondent authority. This aspect has been considered by Division Bench of this Court in case of State of Gujarat versus SV Shah in Letters Patent Appeal No. 562 of 1996 decided on 11th March, 2005 which is quoted as under:
"In State of Orissa v. Dr. (Miss) Binapani Dei, AIR 1967 SC 1269, the Supreme Court recognised the applicability of the rules of natural justice in purely administrative matters and laid down the following propositions:
I. The rule that a party to whose prejudice an order is intended to be passed is entitled to a hearing applies alike to judicial tribunals and bodies of persons invested with authority to adjudicate upon matters involving civil consequences. It is one of the fundamental rules of our constitutional set-up that every citizen is protected against exercise of arbitrary authority by the State or its officers. Duty to act judicially would, therefore, arise from the very nature of the function intended to be performed: it need not be shown to be super-added. If there is power to decide and determine to the prejudice of a person, duty to act judicially is implicit in the exercise of such power. If the essentials of justice be ignored and an order to the prejudice of a person is made, the order is a nullity. That is a basic concept of the rule of law and importance thereof transcends the significance of a decision in any particular case.
II. It is true that the order is administrative in character, but even an administrative order which involves civil consequences, as already stated, must be made consistently with the rules of natural justice after informing the first respondent of the case of the State, the evidence in support thereof and after giving an opportunity to the first respondent of being heard and meeting or explaining the evidence.
In A.K.Kraipak v. Union of India, AIR 1970 SC 150, the Supreme Court held that thin line of distinction between administrative and quasi judicial function is gradually diminishing and that the rule of fairness/rule of hearing must be read as implicit in every administrative action which results in an adverse order against an affected person.
In Sayeedur Rehman v. State of Bihar, AIR 1973 SC 239, the Supreme Court treated the un written right of hearing as a part of the concept of rule of law by making the following observations:
"This unwritten right of hearing is fundamental to a just decision by any authority which decides a controversial issue affecting the rights of the rival contestants. This right has its roots in the notion of fair procedure. It draws the attention of the party concerned to the imperative necessity of not overlooking the other side of the case before coming to its decision, for nothing is more likely to conduce to just and right decision than the practice of giving hearing to the affected parties. The omission of express requirement of fair hearing in the rules or other source of power claimed for reconsidering an other is supplied by the rule of justice which is considered as an integral part of our judicial process which also governs quasi judicial authorities when deciding controversial points affecting rights of parties."
In Swadesi Cotton Mills v. Union of India, AIR 1981 SC 818, S.L.Kapoor v. Jagmohan and others, AIR 1981 SC 136, Smt. Maneka Gandhi v. Union of India, AIR 1978 SC 597, Olga Telis v. Bombay Municipal Corporation, AIR 1986 SC 180 the Supreme Court reiterated and emphasized that every administrative action which visits a person with adverse civil consequences must be preceded by a notice and opportunity of hearing.
We have prefaced the disposal of this appeal by making reference to the above noted judicial precedents because the only legal issue which calls for determination by the Division Bench is whether the learned Single Judge erred in quashing the action taken by the appellant for revising the pay scale of the respondent and effecting recovery from his pay on the ground of violation of rules of natural justice.
A perusal of the record shows that the respondent joined service as Sales Tax Inspector on 1.2.1973. In furtherance of Resolution dated 5.7.1991 passed by State Government, Commissioner of Sales Tax, Ahmedabad issued order dated 7.11.1992 and fixed the respondent's pay in the higher scale. After two years and about nine months the State Government vide Resolution dated 16.8.94 amended the earlier resolution and revised the criteria for grant of higher grade. As a sequel to the last mentioned resolution, Commissioner, Sales Tax, passed order dated 11.12.95 for re-fixing the pay of the respondent and recovery of the alleged excess paid to him.
The respondent challenged the re-fixation of his pay and consequential withdrawal of higher grade in Special Civil Application No.3/96 on various grounds, including the one that the action taken by non-applicants (appellants herein) is vitiated due to violation of the rules of natural justice.
In the reply affidavit on behalf of the appellants it was not disputed that the pay of the respondent had been re-fixed without giving him notice and opportunity of hearing, but an attempt was made to justify the impugned action on the basis of revised policy decision taken by the State Government.
The learned Single Judge held that the action taken by the competent authority to re-fix the respondent's pay was vitiated due to violation of the rules of natural justice. He, accordingly, quashed the revised fixation of the respondent's pay with liberty to the appellants to pass fresh order after complying with the rules of natural justice.
We have heard Shri A.Y.Kogje, learned Assistant Government Pleader, and with his assistance gone through the records.
Since it is an undisputed position that before re-fixing the respondent's pay and ordering recovery of the alleged excess amount paid to him, the appellants did not give any notice or opportunity of hearing, we have no hesitation to hold that the appellants had violated rule of audi alteram partem and the learned Single Judge did not commit any illegality by quashing order dated 11.12.95.
In Sayeedur Rehman's case (Supra), a somewhat similar question was considered by the Supreme Court in the backdrop of the fact that the management of the school had, after giving financial benefits to the appellant for the period during which he remained under suspension reviewed its decision without giving him notice and opportunity of hearing. Their Lordships held that even though action taken by the management was purely administrative in nature, the appellant was required to be heard before being deprived of the financial benefits given to him in pursuance of the earlier decision.
In the present case, it can not be denied that as a result of grant of higher grade the respondent had acquired the right to receive higher emoluments.
Therefore, no order adversely affecting his right to be paid salary in the higher grade and/or for recovery of the amount already paid to him could have been passed without issuing him notice incorporating the basis of the proposed action and giving him a reasonable opportunity to put forward his defence. This having not been done, the learned Single Judge, in our opinion, rightly nullified the action taken by the appellant.
For the reasons stated above, Appeal is dismissed."
6. In view of above observations made by Division Bench of this Court and considering facts which are not in dispute from records between parties, that before passing impugned order of recovery from pension amount against present petitioners, respondents have not given any reasonable opportunity of hearing and what audit objection has also not been supplied to present petitioners and, therefore, order of recovery which has been passed by District Primary Education Officer, Bhuj against petitioners is required to be quashed and set aside.
7. Accordingly, order of recovery Annexure A in each petition is hereby quashed and set aside.
8. Mr. Maulik Nanavati, Learned AGP submitted that liberty may be given to respondents so they may follow the procedure and then pass appropriate orders after giving reasonable opportunity of hearing to petitioners. However, in such circumstances, this Court is considering recent decision of apex court in case of Syed Abdul Qadir & Ors. v. State of Bihar & Ors.,reported in 2009 AIR SCW page 1829. Relevant discussion made by apex court in para 25 to 28 are quoted as under:
"25. We now come to the question as to whether the amount that has been paid in excess to the appellants-teachers should be recovered or not. It is the submission of the learned counsel appearing on behalf of the appellants - teachers that even if it were to be held that the appellants were not entitled to the benefit of additional increment on promotion, the excess amount that has been paid to the appellants cannot and should not be recovered; it having been paid without any misrepresentation or fraud on their part.
26 From the record that has been produced before us, there is not an iota of doubt that officials of the State Government, responsible for issuing Resolution dated 18.12.1989, were ignorant of the amended provisions of the FR.22-C and it is their inaction, negligence and carelessness which has created all the chaos in the case on hand. Further, until January 1999, the officials of the Education Department of the Government of Bihar were unaware of the amendment in the said rule until the Accountant General, Government of Bihar, on a query being made to him by the Director of Secondary Education, who is the head of the Department of the Secondary Education in the State of Bihar, vide his letter dated 8.1.1999, responded to the said query that the officials of the Education Department came to know of the amendment in FR. 22-C. That apart, it also appears from the record produced before us that while the Finance Department of the Government of Bihar was in favour of making the amended provisions of FR. 22-C applicable to the appellants-teachers after having come to know that the said rule did not exist and had been substituted, the Department of Human Resource Development, Government of Bihar, wanted to apply the unamended provision to the appellants-teachers so as to make available the benefit of additional increment provided for under FR.22-C to its teachers, unaware of the fact that even under FR.22-C they were not entitled to the additional increment as they were not discharging duties and responsibilities of greater importance on the promoted post. This further goes on to show that the authorities in the State of Bihar were not even aware of the basic requirement for grant of additional increment and the decision appears to have been taken without proper application of mind. Otherwise, there was no reason for the Finance Department to state in the counter affidavit filed before the High Court that any affidavit filed on behalf of the Education Department may be ignored as Finance Department was the competent authority. In this very affidavit, the Finance Department while admitting that the pay fixation by the Education Department was wrong, stated as under:-
"...the fixation of pay under Fundamental Rule 22-C has wrongly been made as it was not in existence. Pay fixation on the basis of a non-existent rule is a bona fide mistake."
27. This Court, in a catena of decisions, has granted relief against recovery of excess payment of emoluments/allowances if (a) the excess amount was not paid on account of any misrepresentation or fraud on the part of the employee and (b) 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. The relief against recovery is granted by courts not because of any right in the employees, but in equity, exercising judicial discretion to relieve the employees from the hardship that will be caused if recovery is ordered. But, if in a given case, it is proved that the employee had knowledge that the payment received was in excess of what was due or wrongly paid, or in cases where the error is detected or corrected within a short time of wrong payment, the matter being in the realm of judicial discretion, courts may, on the facts and circumstances of any particular case, order for recovery of the amount paid in excess. See Sahib Ram vs. State of Haryana, 1995 Supp. (1) SCC 18, Shyam Babu Verma vs. Union of India, [1994] 2 SCC 521; Union of India vs. M. Bhaskar, [1996] 4 SCC 416;
V. Ganga Ram vs. Regional Jt., Director, [1997] 6 SCC 139; Col. B.J. Akkara [Retd.] vs. Government of India & Ors. (2006) 11 SCC 709;
Purshottam Lal Das & Ors., vs. State of Bihar, [2006] 11 SCC 492; Punjab National Bank & Ors. Vs. Manjeet Singh & Anr., [2006] 8 SCC 647; and Bihar State Electricity Board & Anr.
Vs. Bijay Bahadur & Anr., [2000] 10 SCC 99.
28Undoubtedly, 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."
9. In PH Reddy versus NTRD and others, reported in 2002 (2) SLR 694, apex court observed as under in para 2:
"2. Mr. Rao, the learned senior counsel appearing for the appellants contended that this Court having held in case of Director General of Posts v. B. Ravindran [JT 1996 (10) SC 228] that the fixation of the salary on re-employment under the basis of relevant rules and regulations cannot be altered to his detriment by a subsequent administrative circulars and, therefore, the order of the appropriate authority fixing the salary could not have been set aside and the pay could not have been re-fixed and, therefore, the learned single Judge was right in his conclusion and rightly interfered with the said order of re-fixation. Mr. K. Ram Kumar appearing for the respondents on the other hand, contended that both the circulars, one of the year 1958 and the other of the year 1983 have been duly considered in the later case of Director General of ESI Corporation v. MP John (JT 1998 (8) SC 338], and it has been held that the two circulars operate in two different fields and therefore an ex-serviceman, who is re-employed will get the minimum pay scale in addition to his full pension a an ex-serviceman from the military authority, and this being the position, the appropriate authority, if had fixed the pay on an erroneous view, was entitled to re-fix the same, and, therefore, the division bench rightly set aside the judgment of the learned single Judge. We have ourselves examined the two office memorandum, one of dated 25.11.58 and the other is of 8.2.1983, and we do not see any infirmity of inconsistency with those circulars relevant in the matter of fixation of pay of an employee, who on retirement from the defence service, have been re-employed in a civil post. In our view, therefore, the judgment of this Court in the Director General, ESI represents the correct view and consequently the order of re-fixation done by the appropriate authority in the case in hand does not require any interference but the employee-appellants who had been in receipt of a higher amount of erroneous fixation by the authority should not be asked to repay the excess pay drawn and, therefore, that part of the order of the authority is set aside.
The direction of the appropriate authority requiring reimbursement of the excess amount drawn is annulled."
10. In view of aforesaid observations made by Hon'ble apex court in above referred judgments, let respondents may follow procedure laid down in accordance with law and pass appropriate order in accordance with law after giving reasonable opportunity of hearing to each petitioner but at such occasions, let respondents may consider aforesaid two decisions of Hon'ble apex court and then to pass appropriate orders in accordance with law.
11. Learned Advocate Mr. Shah has also raised contention on merits relying upon decision of this Court given in Special Civil Application No. 6972 of 2010 decided on 17.8.2010 page 19 and another decision page 26 in Special Civil Application No. 3713 of 2009 dated 25.6.2009. These contentions raised by learned Advocate Mr. Shah on merits can be raised by petitioners as and when respondents give reasonable opportunity of hearing before passing orders. Let such contentions may be raised by petitioners before respondents at the relevant time claiming amounts of pension without any deduction or reduce the same. At that time, respondents are directed to consider such contentions that may be raised by petitioners, while passing appropriate reasoned orders in accordance with law after giving reasonable opportunity to each petitioner.
12. In view of above referred observations and directions, present petitions are disposed of by this Court without expressing any opinion on merits.
(H.K.RATHOD, J) asma Top