Gujarat High Court
Vice Chairman And Chief Executive ... vs Captain (Retired) Sudhir Mohanlal ... on 22 April, 2024
Author: Biren Vaishnav
Bench: Biren Vaishnav
NEUTRAL CITATION
C/LPA/419/2024 ORDER DATED: 22/04/2024
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/LETTERS PATENT APPEAL NO. 419 of 2024
In R/SPECIAL CIVIL APPLICATION NO. 14714 of 2020
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2024
In R/LETTERS PATENT APPEAL NO. 419 of 2024
With
R/CIVIL APPLICATION NO. 1300 of 2024
In
R/LETTERS PATENT APPEAL NO. 419 of 2024
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VICE CHAIRMAN AND CHIEF EXECUTIVE OFFICER, GUJARAT
MARITIME BOARD & ORS.
Versus
CAPTAIN (RETIRED) SUDHIR MOHANLAL CHADHA
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Appearance:
MS SEJAL K MANDAVIA(436) for the Appellant(s) No. 1,2,3
MS HARSHAL N PANDYA(3141) for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE BIREN VAISHNAV
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
Date : 22/04/2024
ORAL ORDER
(PER : HONOURABLE MR. JUSTICE BIREN VAISHNAV) ORDER IN CIVIL APPLICATION FOR DELAY Heard Ms. Sejal Mandavia, learned advocate for the applicant. Ms. Harshal Pandya, learned advocate appears on behalf of the respondent on advance copy.
Having heard learned advocates for the parties and Page 1 of 12 Downloaded on : Wed Apr 24 00:20:11 IST 2024 NEUTRAL CITATION C/LPA/419/2024 ORDER DATED: 22/04/2024 undefined in view of the averments made in the application, delay caused in filing the appeal is condoned. Application is allowed accordingly.
ORDER IN LETTERS PATENT APPEAL
1. Heard Ms. Sejal Mandavia, learned advocate for the appellant and Ms. Harshal Pandya, learned advocate for the respondent on advance copy. With the permission of learned advocates for the parties, the main appeal is taken up for hearing.
2. This appeal under Clause 15 of the Letters Patent arises out of the order dated 09.11.2023 passed by the learned Single Judge in Special Civil Application No. 14714 of 2020.
3. Briefly stated, the facts before us, indicate that the respondent herein was initially appointed as Port Officer with the appellant - Gujarat Maritime Board. At the time Page 2 of 12 Downloaded on : Wed Apr 24 00:20:11 IST 2024 NEUTRAL CITATION C/LPA/419/2024 ORDER DATED: 22/04/2024 undefined of his appointment on 04.08.1999, albeit there was a condition that he should pass Gujarati, Hindi and departmental exams prescribed from time to time. It appears that he did not do so. On the ground that he had not passed these examinations, the increments that were given to him at the time of appointment and during his service period were recovered from the gratuity amount payable to him on his superannuation on 30.11.2019. This action of the appellant Board was challenged before the learned Single Judge.
3.1 The learned Single Judge considering the decision in the case of State of Punjab & Ors. vs. Rafiq Masih (White Washer) etc. reported in (2015) 4 SCC 334 set aside the recovery on the ground that such recovery of the terminal benefits is impermissible.
4. Ms. Sejal Mandavia, learned advocate appearing for the appellant Board would rely upon a recent decision of the Apex Court in the case of Balbir Singh Bhandari vs. Page 3 of 12 Downloaded on : Wed Apr 24 00:20:11 IST 2024 NEUTRAL CITATION C/LPA/419/2024 ORDER DATED: 22/04/2024 undefined State of Uttarakhand reported in AIR 2024 SC 701 and press into service paragraph no. 15 of the order of the learned Single Judge. She would submit that the decision in the case of Rafiq Masih (supra) cannot apply in each and every case, particularly when in the present case, the respondent had given an undertaking that whatever amount that can be recovered can be so recovered at the time of payment of gratuity was a strong case in favour of the appellant and in light of the undertaking, such recovery was just and proper.
5. Ms. Harshal Pandya, learned counsel for the respondent would submit that at the time of the appointment of the respondent in 1999 increments were released. Even when the respondent was promoted to the higher post, no case of any nature of his not being entitled to increments was even made out by the authority. The respondent earned the increments during the course of his service and after having retired in the year 2019, the appellant sought recovery after a period of Page 4 of 12 Downloaded on : Wed Apr 24 00:20:11 IST 2024 NEUTRAL CITATION C/LPA/419/2024 ORDER DATED: 22/04/2024 undefined 20 years.
6. We have in the case of Gujarat State Rural Development Corporation Ltd. vs. Sureshbhai Mavjibhai Patel & Ors. rendered in Letters Patent Appeal No. 282 of 2024 and allied matters decided on 28.03.2024 considering the issue of recovery in case of a retired employee also in context of undertaking so give held thus:
"5. Having considered the submissions made by the learned advocate Mr. Munshaw for the appellant, perusal of the order of the learned Single Judge would indicate that based on the decision of the Hon'ble Apex Court in the case of Rafiq Masih (supra), the learned Single Judge set aside the recovery on the parameters that are set out in paragraph 18 of the decision in the case of Rafiq Masih (supra), which the learned Single Judge has reproduced in paragraph 7.1. of the decision. We, therefore, deem it fit to reproduce paragraphs 7.1. and 8 of the order of the learned Single Judge, which read as under :-
"7.1. It also appears that most of the petitioners were working in Class-3/ Class-4 posts. Thus, the issue is stand covered by directions no.1 and 2 of paragraph no.18 of the decision of Rafiq Masih (supra). Paragraph no.18 is quoted herein below for benefit:-
"18. It is not possible to postulate all Page 5 of 12 Downloaded on : Wed Apr 24 00:20:11 IST 2024 NEUTRAL CITATION C/LPA/419/2024 ORDER DATED: 22/04/2024 undefined 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 herein above, we may, as a ready reference, summarise the following few situations, wherein recoveries by the employers, 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."
8. Considering the law laid down by the Hon'ble Apex Court, there does not appear to be any dispute as regards the fact that the amount recovered from the retiral dues of the petitioners Page 6 of 12 Downloaded on : Wed Apr 24 00:20:11 IST 2024 NEUTRAL CITATION C/LPA/419/2024 ORDER DATED: 22/04/2024 undefined are required to be returned back."
6. As far as argument of learned counsel for the appellant that in light of the decision in the case of Jagdev Singh (supra) it is open for the employer to recover the amounts when an undertaking is given, perusal of the affidavit-in-reply filed by the appellant would indicate that it was not the stand of the Corporation that the benefits of revision of pay were given conditionally on the respondent employees giving an undertaking that in the event a mistake is found, the same shall be recovered. Even the orders granting the benefit which are placed on record dated 22.03.2016 do not record this fact of the employees being given such a benefit conditionally on an undertaking. This therefore would be an argument of the learned counsel for the appellant, relying on the decision in the case of Jagdev Singh (supra) being without merit.
6.1. Even otherwise, the decision in the case of Jagdev Singh (supra) would not be applicable, as on facts here the amounts were paid without any undertaking being sought from the employees.
7. Reliance being placed on the decision in the case of Chandi Prasad Uniyal (supra) also is without merit as the decision in the case of Rafiq Masih (supra) considered the law on the question of recovery including that in the case of Jagdev Singh (supra) and the Hon'ble Apex Court after having examined the decisions rendered by it was of the view that the orders passed by the employer seeking recovery of monetory benefits wrongly extended to the employees can only be interfered with in cases where such recovery would result in hardship of a nature, which would far outweigh, the equitable balance of the employer's right to recover. Paragraphs 7 to 11 of the said decision in the case of Rafiq Masih (supra) need to be reproduced which are as under :-
Page 7 of 12 Downloaded on : Wed Apr 24 00:20:11 IST 2024NEUTRAL CITATION C/LPA/419/2024 ORDER DATED: 22/04/2024 undefined "7. Having examined a number of judgments rendered by this Court, we are of the view, that orders passed by the employer seeking recovery of monetary benefits wrongly extended to employees, can only be interfered with, in cases where such recovery would result in a hardship of a nature, which would far outweigh, the equitable balance of the employer's right to recover. In other words, interference would be called for, only in such cases where, it would be iniquitous to recover the payment made. In order to ascertain the parameters of the above consideration, and the test to be applied, reference needs to be made to situations when this Court exempted employees from such recovery, even in exercise of its jurisdiction under Article 142 of the Constitution of India. Repeated exercise of such power, "for doing complete justice in any cause" would establish that the recovery being effected was iniquitous, and therefore, arbitrary. And accordingly, the interference at the hands of this Court.
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, 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 concerned employee.
If the effect of the recovery from the concerned employee 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 Page 8 of 12 Downloaded on : Wed Apr 24 00:20:11 IST 2024 NEUTRAL CITATION C/LPA/419/2024 ORDER DATED: 22/04/2024 undefined recover.
9. The doctrine of equality is a dynamic and evolving concept having many dimensions. The embodiment of the doctrine of equality, can be found in Articles 14 to 18, contained in Part III of the Constitution of India, dealing with "Fundamental Rights". These Articles of the Constitution, besides assuring equality before the law and equal protection of the laws; also disallow, discrimination with the object of achieving equality, in matters of employment; abolish untouchability, to upgrade the social status of an ostracized section of the society; and extinguish titles, to scale down the status of a section of the society, with such appellations. The embodiment of the doctrine of equality, can also be found in Articles 38, 39, 39A, 43 and 46 contained in Part IV of the Constitution of India, dealing with the "Directive Principles of State Policy". These Articles of the Constitution of India contain a mandate to the State requiring it to assure a social order providing justice - social, economic and political, by inter alia minimizing monetary inequalities, and by securing the right to adequate means of livelihood, and by providing for adequate wages so as to ensure, an appropriate standard of life, and by promoting economic interests of the weaker sections.
10. In view of the afore-stated constitutional mandate, equity and good conscience, in the matter of livelihood of the people of this country, has to be the basis of all governmental actions. An action of the State, ordering a recovery from an employee, would be in order, so long as it is not rendered iniquitous to the extent, that the action of recovery would be more unfair, more wrongful, more improper, and more unwarranted, than the corresponding right of the employer, to recover the amount. Or in other words, till such Page 9 of 12 Downloaded on : Wed Apr 24 00:20:11 IST 2024 NEUTRAL CITATION C/LPA/419/2024 ORDER DATED: 22/04/2024 undefined time as the recovery would have a harsh and arbitrary effect on the employee, it would be permissible in law. Orders passed in given situations repeatedly, even in exercise of the power vested in this Court under Article 142 of the Constitution of India, will disclose the parameters of the realm of an action of recovery (of an excess amount paid to an employee) which would breach the obligations of the State, to citizens of this country, and render the action arbitrary, and therefore, violative of the mandate contained in Article 14 of the Constitution of India.
11. For the above determination, we shall refer to some precedents of this Court wherein the question of recovery of the excess amount paid to 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."
8. It was in the background of these facts that the Hon'ble Apex Court in the case of Rafiq Masih (supra) in paragraph 18 set out the cases where recoveries could not be made. Paragraph 18 of the decision in the case of Rafiq Masih (supra) as already been reproduced by the learned Single Judge in paragraph 7.1. which we have so reproduced in the earlier part of this judgment.
9. Admittedly in the facts of this case it is not disputed that recoveries were sought to be made at the fag end of the employees career when they were retiring and their terminal benefits were withheld and the amounts were sought to be recovered from their retirement benefits. As far as the question of the applicability of the case in the decision in the case of Jagdev Singh (supra), the Hon'ble Apex Court had categorically stated the principle; a recovery can be made when an Page 10 of 12 Downloaded on : Wed Apr 24 00:20:11 IST 2024 NEUTRAL CITATION C/LPA/419/2024 ORDER DATED: 22/04/2024 undefined undertaking has been given apply to the proposition (ii) in the case of Rafiq Masih (supra). In other words, where employees had given an undertaking that they would refund the amounts if found to be excess, was a principle that would apply in the case of Rafiq Masih (supra), where recovery was sought to be made from the retired employees or employees who are due to retire within one year of the order of recovery. On the facts of the present case, we are of the opinion that (i) of the case of Rafiq Masih (supra), which dealt with recovery from the employees belonging to Class-III would apply and even otherwise therefore, irrespective of the position of an undertaking, the case of Jagdev Singh (supra) on the facts of the present case would not apply.
10. In light of the fact that the argument of learned counsel for the appellant was on the aspect of the validity and legality on the question of recovery only, we not only confirm the orders passed by the learned Single Judge, but uphold the directions which have been followed in paragraph 9 of the order.
10.1. At the outset, learned advocate Mr. Munshaw requests that time to comply with the direction of the learned Single Judge be extended. Looking to the financial burden that the appellant may have to undertake in view of complying with the order of the learned Single Judge, we direct appellant - Corporation that orders of the learned Single Judge shall be complied with no later than 01.05.2024."
7. Admittedly, in the case on hand, after having earned increments in the year 1999, only at the time of retirement in the year 2019, the appellant sought to withhold the gratuity and pay the amount of gratuity after Page 11 of 12 Downloaded on : Wed Apr 24 00:20:11 IST 2024 NEUTRAL CITATION C/LPA/419/2024 ORDER DATED: 22/04/2024 undefined recovering the differential amount of the increments, which according to the appellant, the respondent was not entitled to. This was a clear case of recovery beyond a period of 20 years and even if independently considered irrespective of the decision in the case of Rafiq Masih (supra), subsequent recovery at such a belated stage from the gratuity amount could not have been made.
8. On this ground alone, the appeal is dismissed. The order dated 09.11.2023 passed by the learned Single Judge is confirmed. The appellant is directed to pay the amount of gratuity within a period of four weeks from the date of receipt of the copy of this order with the interest stipulated in the directions set out by the learned Single Judge in the order dated 09.11.2023. Connected civil application is disposed of.
(BIREN VAISHNAV, J) (PRANAV TRIVEDI, J) DIVYA Page 12 of 12 Downloaded on : Wed Apr 24 00:20:11 IST 2024