Madhya Pradesh High Court
Smt. Savita Mehto vs The State Of Madhya Pradesh on 3 July, 2024
1 WP-25666-2023
IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE VIVEK JAIN
ON THE 3 rd OF JULY, 2024
WRIT PETITION No. 25666 of 2023
(SMT. SAVITA MEHTO
Vs
THE STATE OF MADHYA PRADESH AND OTHERS)
Appearance:
(SHRI SHANKAR DAYAL MISHRA - ADVOCATE FOR THE PETITIONER)
(SHRI ANUJ SINGH - PANEL LAWYER FOR THE RESPONDENT / STATE)
ORDER
Challenge in this petition is made to recovery being effected from the retiral dues payable to the petitioner on account of death of her husband who expired while in service on 22.12.2018. It is the case of the petitioner that as per the information received under the Right to Information Act the petitioner was informed about the recovery pending against her deceased husband. This information was obtained in the year 2020 and the petitioner criticizes the recovery against her deceased husband who was posted as Head Constable in Madhya Pradesh Police, being made from retiral dues payable to the petitioner after the death of her husband.
2 . Per Contra, learned counsel for the State has submitted that there were punishment orders against the deceased husband of petitioner and on account of finding of misconduct, there was an order dated 13.12.2011 wherein the punishment of reduction of one increment with cumulative effect was imposed on the deceased employee. However, the deceased employee kept on obtaining pay with increased increment without implementation of the order dated 13.12.2011. Learned counsel for the State has further submitted that an order dated 13.02.2018 was passed whereby a period of 1007 days was Signature Not Verified Signed by: NAVEEN KUMAR SARATHE Signing time: 7/6/2024 3:26:09 PM 2 WP-25666-2023 declared to be leave without pay for which the deceased employee had already obtained salary. Thus it is contended that the recovery proposed against the petitioner is recovery on account of penalty order on findings of misconduct against deceased husband of the petitioner and is not a case of mistaken excess payment or mistaken erroneous fixation. Rather it is a case of penalty orders being executed which were lawfully passed against the deceased husband of the petitioner while he was in service as Head Constable in police force.
3. Heard the learned counsel for the parties and perused the record.
4. Learned counsel for the petitioner has heavily relied upon the judgment of Hon'ble Apex Court in the case of State of Punjab v. Rafiq Masih reported in (2015) 4 SCC 334 to submit that the recovery from retired or deceased employee from pensionary benefits is bad in law. No doubt, the recovery from employees belonging to Class-III, Class- IV service and recovery from retired employees or employees who are due to retire within one year and has been held to be bad in law. However, it is not a case of mistaken payment but it is a case of recovery being proposed on account of lawfully passed penalty orders against the deceased employee while he was in service. The Hon'ble Court in the case of Rafiq Masih (supra) has taken note of certain previous cases wherein wrongful payment was made and it was erroneously made to the employee and the employee did not have knowledge that he is getting some payment which is over and above his actual entitlement. The Hon'ble Apex Court also took note of the cases where employee got payment in excess of his entitlement for a number of years exceeding five years. The Hon'ble Apex Court in Rafiq Masih (supra) case has held as under:
"11. For the above determination, we shall refer to some precedents of this Court wherein the question of recovery Signature Not Verified Signed by: NAVEEN KUMAR SARATHE Signing time: 7/6/2024 3:26:09 PM 3 WP-25666-2023 of the excess amount paid to the employees, came up for consideration, and this Court disallowed the same. These are situations, in which High Courts all over the country, repeatedly and regularly set aside orders of recovery made on the expressed parameters.
12. Reference may first of all be made to the decision in Syed Abdul Qadir v. State of Bihar [Syed Abdul Qadir v. State of Bihar, (2009) 3 SCC 475 : (2009) 1 SCC (L&S) 744] , wherein this Court recorded the following observation in para 58: (SCC p. 491) "58. 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 v. State of Haryana [Sahib Ram v. State of Haryana, 1995 Supp (1) SCC 18 : 1995 SCC (L&S) 248] , Shyam Babu Verma v. Union of India [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] , V. Gangaram v. Director [(1997) 6 SCC 139 : 1997 SCC (L&S) 1652] , B.J. Akkara v. Govt. of India [B.J. Akkara v. Govt. of India, (2006) 11 SCC 709 : (2007) 1 SCC (L&S) 529] , Purshottam Lal Das v. State of Bihar [(2006) 11 SCC 492 : (2007) 1 SCC (L&S) 508] , Punjab National Bank v. Manjeet Singh [(2006) 8 SCC 647 : (2007) 1 SCC (L&S) 16] and Bihar SEB v. Bijay Bhadur [(2000) 10 SCC 99 : 2000 SCC (L&S) 394] ."
(Emphasis Supplied)
13. First and foremost, it is pertinent to note, that this Court in its judgment in Syed Abdul Qadir case [Syed Abdul Qadir v. State of Bihar, (2009) 3 SCC 475 : (2009) 1 SCC (L&S) 744] recognised, that the issue of recovery revolved on the action being iniquitous. Dealing with the Signature Not Verified Signed by: NAVEEN KUMAR SARATHE Signing time: 7/6/2024 3:26:09 PM 4 WP-25666-2023 subject of the action being iniquitous, it was sought to be concluded, that when the excess unauthorised 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. All arbitrary actions are truly, actions in violation of Article 14 of the Constitution of India. The logic of the action in the instant situation, is iniquitous, or arbitrary, or violative of Article 14 of the Constitution of India, because it would be almost impossible for an employee to bear the financial burden, of a refund of payment received wrongfully for a long span of time. It is apparent, that a government employee is primarily dependent on his wages, and if a deduction is to be made from his/her wages, it should not be a deduction which would make it difficult for the employee to provide for the needs of his family. Besides food, clothing and shelter, an employee has to cater, not only to the education needs of those dependent upon him, but also their medical requirements, and a variety of sundry expenses. Based on the above consideration, we are of the view, that if the mistake of making a wrongful payment is detected within five years, it would be open to the employer to recover the same. However, if the payment is made for a period in excess of five years, even though it would be open to the employer to correct the mistake, it would be extremely iniquitous and arbitrary to seek a refund of the payments mistakenly made to the employee.
14. In this context, reference may also be made to the decision rendered by this Court in Shyam Babu Verma v. Union of India [Shyam Babu Verma v. Union of India, (1994) 2 SCC 521 : 1994 SCC (L&S) 683 : (1994) 27 ATC 121] , wherein this Court observed as under: (SCC pp. 525-26, para 11) "11. Although we have held that the petitioners were entitled only to the pay scale of Rs 330-480 in terms of the recommendations of the Third Pay Commission w.e.f. 1-1- 1973 and only after the period of 10 years, they became entitled to the pay scale of Rs 330-560 but as they have Signature Not Verified Signed by: NAVEEN KUMAR SARATHE Signing time: 7/6/2024 3:26:09 PM 5 WP-25666-2023 received the scale of Rs 330-560 since 1973 due to no fault of theirs and that scale is being reduced in the year 1984 with effect from 1-1-1973, it shall only be just and proper not to recover any excess amount which has already been paid to them. Accordingly, we direct that no steps should be taken to recover or to adjust any excess amount paid to the petitioners due to the fault of the respondents, the petitioners being in no way responsible for the same." (emphasis supplied) It is apparent, that in Shyam Babu Verma case [Shyam Babu Verma v. Union of India, (1994) 2 SCC 521 : 1994 SCC (L&S) 683 : (1994) 27 ATC 121] , the higher pay scale commenced to be paid erroneously in 1973. The same was sought to be recovered in 1984 i.e. after a period of 11 years. In the aforesaid circumstances, this Court felt that the recovery after several years of the implementation of the pay scale would not be just and proper. We therefore hereby hold, recovery of excess payments discovered after five years would be iniquitous and arbitrary, and as such, violative of Article 14 of the Constitution of India.
15. Examining a similar proposition, this Court in B.J. Akkara v. Govt. of India [B.J. Akkara v. Govt. of India, (2006) 11 SCC 709 : (2007) 1 SCC (L&S) 529] observed as under: (SCC pp. 728-29, para 28) "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 Signature Not Verified Signed by: NAVEEN KUMAR SARATHE Signing time: 7/6/2024 3:26:09 PM 6 WP-25666-2023 realm of judicial discretion, courts may on the facts and circumstances of any particular case refuse to grant such relief against recovery."
(emphasis supplied) A perusal of the aforesaid observations made by this Court in B.J. Akkara case [B.J. Akkara v. Govt. of India, (2006) 11 SCC 709 : (2007) 1 SCC (L&S) 529] reveals a reiteration of the legal position recorded in the earlier judgments rendered by this Court, inasmuch as, it was again affirmed, that the right to recover would be sustainable so long as the same was not iniquitous or arbitrary. In the observation extracted above, this Court also recorded, that recovery from the employees in lower rung of service, would result in extreme hardship to them. The apparent explanation for the aforesaid conclusion is, that the employees in lower rung of service would spend their entire earnings in the upkeep and welfare of their family, and if such excess payment is allowed to be recovered from them, it would cause them far more hardship, than the reciprocal gains to the employer. We are therefore satisfied in concluding, that such recovery from employees belonging to the lower rungs (i.e. Class III and Class IV--sometimes denoted as Group C and Group D) of service, should not be subjected to the ordeal of any recovery, even though they were beneficiaries of receiving higher emoluments, than were due to them. Such recovery would be iniquitous and arbitrary and therefore would also breach the mandate contained in Article 14 of the Constitution of India.
16. This Court in Syed Abdul Qadir v. State of Bihar [Syed Abdul Qadir v. State of Bihar, (2009) 3 SCC 475 :
(2009) 1 SCC (L&S) 744] held as follows: (SCC pp. 491-
92, para 59) "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 Signature Not Verified Signed by: NAVEEN KUMAR SARATHE Signing time: 7/6/2024 3:26:09 PM 7 WP-25666-2023 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. The 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."
(emphasis supplied) Premised on the legal proposition considered above, namely, whether on the touchstone of equity and arbitrariness, the extract of the judgment reproduced above, culls out yet another consideration, which would make the process of recovery iniquitous and arbitrary. It is apparent from the conclusions drawn in Syed Abdul Qadir case [Syed Abdul Qadir v. State of Bihar, (2009) 3 SCC 475 : (2009) 1 SCC (L&S) 744] , that recovery of excess payments, made from the employees who have retired from service, or are close to their retirement, would entail extremely harsh consequences outweighing the monetary gains by the employer. It cannot be forgotten, that a retired employee or an employee about to retire, is a class apart from those who have sufficient service to their credit, before their retirement. Needless to mention, that at retirement, an employee is past his youth, his needs are far in excess of what they were when he was younger. Despite that, his earnings have substantially dwindled (or would substantially be reduced on his retirement). Keeping the aforesaid circumstances in mind, we are satisfied that recovery would be iniquitous and arbitrary, if it is sought to be made after the date of retirement, or soon before retirement. A period within one year from the date of superannuation, in our considered view, should be accepted as the period during which the recovery should be treated as iniquitous. Therefore, it would be justified to treat an order of recovery, on account of wrongful payment made to an employee, as arbitrary, if the recovery is sought Signature Not Verified Signed by: NAVEEN KUMAR SARATHE Signing time: 7/6/2024 3:26:09 PM 8 WP-25666-2023 to be made after the employee's retirement, or within one year from the date of his retirement on superannuation.
17. Last of all, reference may be made to the decision in Sahib Ram v. Union of India [Sahib Ram v. State of Haryana, 1995 Supp (1) SCC 18 : 1995 SCC (L&S) 248] wherein it was concluded as under: (SCC pp. 19-20, paras 4-5) "4. Mr Prem Malhotra, learned counsel for the appellant, contended that the previous scale of Rs 220-550 to which the appellant was entitled became Rs 700-1600 since the appellant had been granted that scale of pay in relaxation of the educational qualification. The High Court was, therefore, not right in dismissing the writ petition. We do not find any force in this contention. It is seen that the Government in consultation with the University Grants Commission had revised the pay scale of a Librarian working in the colleges to Rs 700-1600 but they insisted upon the minimum educational qualification of first or second class MA, MSc, MCom plus a first or second class BLib Science or a Diploma in Library Science. The relaxation given was only as regards obtaining first or second class in the prescribed educational qualification but not relaxation in the educational qualification itself.
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."
(emphasis supplied) It would be pertinent to mention, that Librarians were Signature Not Verified Signed by: NAVEEN KUMAR SARATHE Signing time: 7/6/2024 3:26:09 PM 9 WP-25666-2023 equated with Lecturers, for the grant of the pay scale of Rs 700-1600. The above pay parity would extend to Librarians, subject to the condition that they possessed the prescribed minimum educational qualification (first or second class MA, MSc, MCom plus a first or second class BLib Science or a diploma in Library Science, the degree of MLib Science being a preferential qualification). For those Librarians appointed prior to 3-12-1972, the educational qualifications were relaxed. In Sahib Ram case [Sahib Ram v. State of Haryana, 1995 Supp (1) SCC 18 :
1995 SCC (L&S) 248] , a mistake was committed by wrongly extending to the appellants the revised pay scale, by relaxing the prescribed educational qualifications, even though the appellants concerned were ineligible for the same. The appellants concerned were held not eligible for the higher scale, by applying the principle of "equal pay for equal work". This Court, in the above circumstances, did not allow the recovery of the excess payment. This was apparently done because this Court felt that the employees were entitled to wages, for the post against which they had discharged their duties. In the above view of the matter, we are of the opinion, that it would be iniquitous and arbitrary for an employer to require an employee to refund the wages of a higher post, against which he had wrongfully been permitted to work, though he should have rightfully been required to work against an inferior post.
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 Signature Not Verified Signed by: NAVEEN KUMAR SARATHE Signing time: 7/6/2024 3:26:09 PM
10 WP-25666-2023 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."
5. In the present case, the recovery proposed against the retiral dues payable to the petitioner is on account of penalty orders lawfully passed against the deceased husband of the petitioner while he was in service and it cannot be deemed that the deceased husband of the petitioner did not have knowledge of said penalty orders. The petitioner has not come out with a case that deceased husband of the petitioner had even challenged the penalty orders while he was in service or he was alive. Relying on the judgment of Hon'ble Apex in Rafiq Masih (supra), the amount sought to be recovered in execution of penalty orders does not seem to be equitable and proper. Consequently, the petition so far as recovery aspect is concerned stands dismissed.
6. However, looking to the position that recovery is being sought from widow and recovery of Rs. 21,69,036/- has principal amount component of Rs.14,27,155/- and interest component of Rs. 7,41,881/-, the action of respondents in recovering interest from widow does not seem to be proper and equitable.
7. Accordingly, while maintaining the principal amount of recovery, the interest part of Rs.7,41,881/-is set aside. It is further directed that after deduction of the said amount, the remaining retiral dues be paid and settled to the petitioner expeditiously, preferably within a period of 2 months from the Signature Not Verified Signed by: NAVEEN KUMAR SARATHE Signing time: 7/6/2024 3:26:09 PM 11 WP-25666-2023 date of production of certified copy of this order.
(VIVEK JAIN) JUDGE nks Signature Not Verified Signed by: NAVEEN KUMAR SARATHE Signing time: 7/6/2024 3:26:09 PM