Himachal Pradesh High Court
Kesh Raj vs State Of H.P. & Ors on 16 June, 2023
Bench: Tarlok Singh Chauhan, Satyen Vaidya
IN THE HIGH COURT OF HIMACHAL PRADESH,
SHIMLA
CWP No. 876 of 2023.
.
Date of Decision : 16th June, 2023.
Kesh Raj .....Petitioner.
Versus
State of H.P. & Ors. .....Respondents.
Coram
The Hon'ble Mr. Justice Tarlok Singh Chauhan, Judge.
The Hon'ble Mr. Justice Satyen Vaidya, Judge.
Whether approved for reporting? No.
For the Petitioner: Mr. Gurinder Singh, Advocate.
For the Respondents: Mr. Anup Rattan, Advocate General,
with Mr. Yash Wardhan Chauha, Sr.
Addl. A.G. and Mr. Ramakant
Sharma, Addl. A.G., for respondent
No.1.
Mr. Janak Raj, Advocate, for
respondents No. 2 to 4.
Tarlok Singh Chauhan, Judge (Oral)
The present petition has been filed for grant of the following substantive relief:-
"It is, therefore, respectfully prayed that in view of the facts and circumstances of the case enumerated above, this Hon'ble Court may ::: Downloaded on - 16/06/2023 20:33:00 :::CIS ...2...
kindly be pleased to issue an appropriate writ, .
order or direction in favour of the petitioner and the impugned Office Order No.44/2022-43 dated 16.07.2022 and Office Order No. 293/2022-23 dated 13.10.2022 be held wrong and illegal and be set aside and quashed."
2. It is not in dispute that the petitioner herein was serving as a Clerk (Class-III) during the period of which the recovery was ordered to be effected and aggrieved by the order of recovery and rejection of his request for quashing the order of recovery, has filed the instant petition.
3. The issue regarding recoveries has been decided by this Court in batch of petitions, lead case being CWPOA No. 3145/2019, titled S.S. Chaudhary Vs. State of H.P. & Others, decided on 24.03.2022, wherein, after taking into consideration entire law on the subject, this Court has laid down the following parameters where recovery by the employer would be permissible/impermissible from the employee. Paragraph 35 whereof reads as under:
"In view of the aforesaid discussion, as held by Hon'ble Supreme Court in Rafiq Masih's case (supra), it is not ::: Downloaded on - 16/06/2023 20:33:00 :::CIS ...3...
possible to postulate all situations of hardship, where .
payments have mistakenly been made by the employer, yet in the following situations, recovery by the employer would be impermissible in law:
"(i) Recovery from employees belonging to Class-III and Class-IV service (or Group 'C' and Group 'D' service).
(ii) Recovery from retired employees, or employees who are due to retire within one year, of the order of recovery.
(iii) Recovery from employees, when the excess payment has been made for a period in excess of five years, before the order of recovery is issued.
(iv) Recovery in cases where an employee has wrongfully been required to discharge duties of a higher post, and has been paid accordingly, 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.
(vi) Recovery on the basis of undertaking from the employees essentially has to be confined to Class I/Group-A and Class-II/Group-B, but even then, the Court may be required to see whether the recovery would be iniquitous, harsh or arbitrary to such an extent, as would far overweigh the equitable balance ::: Downloaded on - 16/06/2023 20:33:00 :::CIS ...4...
of the employer's right to recover. (vii) Recovery from .
the employees belonging to Class-III and Class-IV even on the basis of undertaking is impermissible.
(viii) The aforesaid categories of cases are by way of illustration and it may not be possible to lay down any precise, clearly defined, sufficiently channelised and inflexible guidelines or rigid formula and to give any exhaustive list of myriad kinds of cases. Therefore, each of such cases would be required to be decided on its own merit"
4. At this stage, it would be apt to refer to a recent judgment rendered by the Hon'ble Supreme Court in Thomas Daniel Vs. State of Kerala & Others, 2022 AIR (SC) 2153, wherein it has been held as under:
(9) This Court in a catena of decisions has consistently held 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 ::: Downloaded on - 16/06/2023 20:33:00 :::CIS ...5...
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.
(10) In Sahib Ram vs. State of Haryana and Others, this 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 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 1 1995 Supp (1) SCC 18 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."
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(11) In Col. B.J. Akkara (Retd.) v. Government of India .
and Others 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 on account of the wrong interpretation/understanding of the circular dated 76 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 2 (2006) 11 SCC 709 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 that wrong payments should not be recovered, as pensioners are in a more disadvantageous position when ::: Downloaded on - 16/06/2023 20:33:00 :::CIS ...7...
compared to inservice 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 761999 till the issue of the clarificatory circular dated 1192001. Insofar as any excess payment made after the circular dated 1192001, 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."
(12) In Syed Abdul Qadir and Others v. State of Bihar and Others excess payment was sought to be recovered which was made to the appellants teachers on account of mistake and wrong interpretation of prevailing Bihar Nationalized Secondary School (Service Conditions) Rules, 1983. The appellants therein contended 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 should not be recovered from them, it having been paid without any misrepresentation or fraud on their part. The Court held that the appellants cannot be held responsible in such a situation and recovery of the excess payment should not be ordered, especially when the employee has subsequently retired. The court observed that in general parlance, recovery is prohibited by courts where there exists no misrepresentation or fraud on the part of the employee and when the excess payment has been made by ::: Downloaded on - 16/06/2023 20:33:00 :::CIS ...8...
applying a wrong interpretation/ understanding of a .
Rule or Order. It was held thus:
"59. Undoubtedly, the excess amount that has been paid to the appellant 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 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."
(13) In State of Punjab and Others v. Rafiq Masih (White Washer) and Others 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 State), the issue resolved would be in consonance with the concept of justice, which is assured to the citizens of India, ::: Downloaded on - 16/06/2023 20:33:00 :::CIS ...9...
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
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."
(14) Coming to the facts of the present case, it is not contended before us that on account of the misrepresentation or fraud played by the appellant, the excess amounts have been paid. The appellant has ::: Downloaded on - 16/06/2023 20:33:00 :::CIS ...10...
retired on 31.03.1999. In fact, the case of the .
respondents is that excess payment was made due to a mistake in interpreting Kerala Service Rules which was subsequently pointed out by the Accountant General.
(15) Having regard to the above, we are of the view that an attempt to recover the said increments after passage of ten years of his retirement is unjustified."
5. The issue in question is otherwise no longer res integra in view of the latest judgment of the Hon'ble Supreme court in M.P. Medical Officers Association vs. State of M.P., AIR 2022 SC 4009, wherein principles as laid down in Rafiq Masih's case were reiterated in the following terms:
"5. It is not in dispute that the members of the appellant association, who were serving as Specialists, Dental Specialists and officers in the specialist's cadre got the benefits under the circular dated 23.05.2009. It was the Department/State, who issued the circular dated 23.05.2009 and paid the benefits under the circular dated 23.05.2009 to the members of the appellant association, which subsequently came to be withdrawn by the State in the year 2012. Therefore, as such, there was neither any misrepresentation on the part of the concerned employees
- members of the appellant association nor can the mistake be attributed to them. The mistake, if any, can be said to be that of the Department/State, who issued the circular dated ::: Downloaded on - 16/06/2023 20:33:00 :::CIS ...11...
23.05.2009 under which the members of the association .
were given certain benefits till the same was withdrawn in the year 2012. Therefore, in the peculiar facts and circumstances of the case, the State was not justified in ordering recovery of the excess amount paid along with the interest. It is true that stricto sensu, the decision of this Court in the case of State of Punjab and others Vs. Rafiq Masih, (2015) 4 SCC 334 may not be applicable. However, at the same time, as observed hereinabove, and in the facts and circumstances of the case, the State was not justified in ordering recovery of the excess amount paid with interest, more particularly, when it is reported that some of the doctors/dentists - members of the association have retired on attaining the age of superannuation and the recovery shall be from their pension/pensionary benefits. However, at the same time, their pay fixation and the pension shall have to be as per the order dated 26.08.2008".
6. The case of the petitioner is squarely covered by the judgment of the Hon'ble Supreme Court and the judgment rendered by this Court in S.S. Chaudhary's case (supra) more particularly, para 35 (i) and (iii) thereof.
7. For the reasons stated in S.S. Chaudhary's case and other cases referred to above, the instant petition is allowed and the impugned order of recovery is quashed and set aside. Consequently, the amount, if any, recovered from the petitioner, shall be refunded by the respondents within a ::: Downloaded on - 16/06/2023 20:33:00 :::CIS ...12...
period of three months from today. Pending application(s), if .
any, also stands disposed of.
(Tarlok Singh Chauhan) Judge 16 th June, 2023.
(jai)
r to (Satyen Vaidya)
Judge.
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