Gujarat High Court
Saileshkumar Babubhai Dave vs Gujarat State Electricity Corporation ... on 6 August, 2021
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
C/SCA/8455/2017 JUDGMENT DATED: 06/08/2021
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 8455 of 2017
FOR APPROVAL AND SIGNATURE: Sd./-
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
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1 Whether Reporters of Local Papers may be allowed NO
to see the judgment ?
2 To be referred to the Reporter or not ? NO
3 Whether their Lordships wish to see the fair copy NO
of the judgment ?
4 Whether this case involves a substantial question NO
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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SAILESHKUMAR BABUBHAI DAVE & 20 other(s)
Versus
GUJARAT STATE ELECTRICITY CORPORATION LTD. & 1 other(s)
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Appearance:
MR TR MISHRA(483) for the Petitioner(s) No.
1,10,11,12,13,14,15,16,17,18,19,2,20,21,3,4,5,6,7,8,9
MR DIPAK R DAVE(1232) for the Respondent(s) No. 1,2
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
Date : 06/08/2021
ORAL JUDGMENT
1. Heard,learned Advocate Mr. T.R. Mishra for the petitioners and learned Advocate Mr. Dipak R. Dave for the Respondents.
2. Rule. Learned Advocate Mr. Dave waives service of rule for the respondents.
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3. Considering the fact that the issues involved in this petition runs in a narrow compass, with the consent of the learned Advocates for the parties, the same is taken-up for hearing and final disposal today.
4. By way of this petition under Article 226 of the Constitution of India, the petitioners have prayed for the following reliefs;
"7. ...
(A) That Your Lordships be pleased to issue an order, direction and / or writ in the nature of certiorari or any other appropriate writ, order or direction, quashing and setting aside the impugned orders marked ANN.A to U to this petition, with regard to recovery of alleged excess payment made to the petitioners, being illegal, arbitrary, discriminatory and violative of Articles 14 & 16 of the Constitution of India;
(B) Pending admission and final disposal of this petition, Your Lordships be pleased to restrain the respondents, their agents and servants from effecting any recovery pursuant to the orders placed on record at ANN. A to U. (C) ..."
5. The brief facts of the case are that the petitioners are the members of the Akhil Gujarat Page 2 of 37 Downloaded on : Sun Jan 16 06:32:14 IST 2022 C/SCA/8455/2017 JUDGMENT DATED: 06/08/2021 Vidhyut Kamdar Sangh, which is a registered and recognized union by the respondents and working in the Class-III / Class-IV cadre with the respondents.
5.1 It is the case of the petitioners herein that the respondents have passed orders of recovery from the salaries of the petitioners on the ground that the pay fixation is modified as per the orders issued to the petitioners.
5.1 The respondents in the year 2016 passed the orders in case of the petitioners that in view of the partial modification of the order dated 16th July, 2009, the pay fixation under the General Standing Order (in brief, 'GSO-I'), 2001, was modified and as per the modification there is excess payment made to the petitioners, which is being sought to be recovered by the respondents.
5.2 The petitioners therefore made various representations through their Union, relying upon the circulars issued by the Ministry of Personnel, Public Grievances and Pension, Dated: 2nd March, 2016, urging that such recovery is not maintainable as the petitioners are not responsible and have not made any mis-representation or have not committed any fraud in fixing the salary of the employees and requested them to withdraw the recovery orders.
5.3 As the respondents did not consider the representation made by the Union of the petitioners, Page 3 of 37 Downloaded on : Sun Jan 16 06:32:14 IST 2022 C/SCA/8455/2017 JUDGMENT DATED: 06/08/2021 the petitioners preferred this petition, seeking aforesaid prayers.
6. This Court (Coram: Mr. S.G. Shah, J., as His Lordship then was) issued notice on 26 th April, 2017 and granted ad-interim-relief in terms of Paragraph- 7(B), restraining the respondents from effecting recovery from the petitioners.
6.1 The interim relief granted vide order dated 26th April, 2017 has continued till date.
6.2 In the interregnum, the respondents preferred Civil Application No. 8370 of 2017 with a prayer to deposit a sum of Rs.82,940.91/-, out of the total amount due and payable to Petitioner No.3 herein, as he was due to retire on 30th June, 2017, on attaining the age of superannuation.
6.3 The order passed by this Court (Coram: Mr. S.G. Shah, J., as His Lordship then was) on 12th January, 2018 reads as under:
"1. Heard learned advocate Mr. Dipak R. Dave for the applicants and learned advocate Mr. T.R. Mishra for the respondents. Perused the record.
2. By order dated 26.4.2017 in main Special Civil Application, this court has granted interim relief in terms of paragraph 7(B) of the petition, whereby, applicants herein being original respondents are restrained from Page 4 of 37 Downloaded on : Sun Jan 16 06:32:14 IST 2022 C/SCA/8455/2017 JUDGMENT DATED: 06/08/2021 affecting any recovery pursuant to order impugned in the main petition. However, now, original respondents have come forward with this application with a request that they may be permitted to deposit the amount in dispute, which is only Rs.82,940.91 ps. from the total amount payable to the respondents, which is Rs.11,98,048/- before this court and to invest it in FDR so as to earn maximum interest on such amount and with a direction that such deposit shall be subject to outcome of the petition.
3. Though respondents are objecting to pass such order relying upon the judgment in the case of Dolatsingh Sardarsingh Sindha & Ors. Vs. Gujarat State Electricity Corpn. Ltd. decided on 24.2.2015 in Special Civil Applications No.21762 of 2005 to 21766 of 2005, so also judgment of Hon'ble Supreme Court of India in the case of State Of Punjab & Ors vs Rafiq Masih (White Washer) reported in (2014)8 SCC 883, but the fact remains that this court has already restrained the respondents from recovering any amount from the petitioners and by such application, applicants do not want to recover any amount from the petitioners, but simply want to safeguard the amount in dispute by investing the same in FDR before the court so as to avoid inconvenience to either side to recover such amount at the end of decision in main petition. The applicants are relying upon order dated 28.9.2012 in Civil Application No.10894 of 2012 so also order dated 26.2.2014 in Civil Application No.788 of 2014.Page 5 of 37 Downloaded on : Sun Jan 16 06:32:14 IST 2022
C/SCA/8455/2017 JUDGMENT DATED: 06/08/2021
4. In view of above fact, when the applicants - respondents have come forward to release the entire retirement benefit in favour of the original petitioners with a request to deposit the disputed amount, which is less than 10% of the total retirement benefit, before this court as deposit, I do not see any reason to refuse such request because, ultimately, such amount would lie before the court and it would be subject to outcome of the main petition. Such arrangement cannot be considered as a deduction of any amount at this stage and therefore, objections of the original petitioners are unwarranted and having no force.
5. In view of above facts and circumstances, the applicants herein being original respondents are now hereby directed to deposit the amount of Rs.82,940.91 ps. before the Registry of this court within three weeks'. As and when such amount is deposited, it should be invested in FDR so as to earn maximum interest on it. Such deposit with accrued interest shall be subject to outcome of this petition. Learned advocate for the applicants has made a statement that rest of the amount of retirement benefit being Rs.11,15,108/- has already been disbursed and paid to the original petitioners.
6. The present Civil Application is allowed and disposed of in above terms."
7. Learned Advocate Mr. Mishra appearing for the petitioners submitted that the revision of pay-scale Page 6 of 37 Downloaded on : Sun Jan 16 06:32:14 IST 2022 C/SCA/8455/2017 JUDGMENT DATED: 06/08/2021 as per the GSO-I dated 1st July, 2009 of respondent No.1 was implemented and accordingly, the pay-scale of the petitioners was fixed and the same was, later on, modified by the impugned orders passed in the year 2016 resolving to recover the excess amount paid to the petitioners.
7.1 It was submitted that the decision to recover the excess amount is taken without giving any opportunity of hearing and without issuing any show- cause notice to the petitioners and therefore the same is liable to be quashed and set aside.
7.2 It was submitted that this Court as well as the Apex Court have decided in various cases that the payment of excess amount paid to the employees cannot be recovered from the salaries of Class-III and Class-IV employees, particularly, when the employees have not committed any fraud and no misrepresentation was made by them in the matter of fixation of pay- scale.
7.3 It was submitted that reserving the rights of the petitioners to separately agitate the issue of modification of pay-scale, this petition is restricted only to the limited aspect of recovery orders passed by the respondents, which are placed on the record of this petition.
7.4 Learned Advocate Mr. Mishra placed reliance on the circular issued by the Ministry of Personnel, Page 7 of 37 Downloaded on : Sun Jan 16 06:32:14 IST 2022 C/SCA/8455/2017 JUDGMENT DATED: 06/08/2021 Public Grievances and Pension, Dated: 2nd March, 2016 as well as the decision of the Apex Court in the case of 'State of Punjab & Others Vs. Raifq Masih (White Washer) And Others'1 and also the decision of this Court in the case of 'Dolatsingh Sardarsingh Sindha and Others Vs. Gujarat State Electricity Corporation Limited', rendered in Special Civil Application Nos. 21762 to 21766 of 2005, Dated: 24th February, 2015.
8. On the other hand, learned Advocate Mr. Dave appearing for the respondents submitted that Clause- 36 of GSO-I dated 1st July, 2009 stipulates that any wrongful payment made to the employees or officer pursuant to GSO-I or any other justified action of the company being public money, the same shall be recovered in suitable equal installments. It was therefore submitted that in view of Clause-36, the respondents are justified in effecting recovery of the excess amount paid in vie of the modification of the pay-scale of the petitioners.
8.1 Learned Advocate Mr. Dave also raised objections with regard to the filing of the single petition, challenging different orders of recovery of the excess amount paid to the petitioners.
8.2 It was further submitted that the re-fixation of the pay of the petitioners by the respondents was due to Panandhro Higher Grade Scheme (in brief, 'PHG Scheme') issued vide Circular No. 179 on 20th February, 1985.
1 (2015) 4 SCC 334;
Page 8 of 37 Downloaded on : Sun Jan 16 06:32:14 IST 2022C/SCA/8455/2017 JUDGMENT DATED: 06/08/2021 8.2.1 It was submitted that in the year 1985, there was less development in Panandhro and therefore the higher grade pay-scale was given to the employees, as they were reluctant to go to Panandhro and accordingly PHG Scheme was introduced by granting one step ahead pay than the actual pay to the employees working at Panandhro.
8.3 It was submitted that as Panandhro came to be fully developed with the passage of time and all the facilities are now available and therefore, the employees shall be reluctant to move from Panandhro and therefore on 15th February, 2015, PHG Scheme was withdrawn and the employees were put at par with the employees working at other thermal power stations. It was therefore submitted that the respondents are justified in re-fixing the pay-scale of the petitioners and in support of his submissions, he has placed reliance on the following averments made in the affidavit-in-reply for and on behalf of the respondent;
"6. The petitioners are working at Kutch Lignite Thermal Power Station (KLTPS). Earlier Panandhro Higher Grade Scheme (PHG) was issued by GSECL vide Circular No.179 dated 20.02.1985. By virtue of the said scheme, employees working at Panandhro were required to be paid higher scale. Thus, as per PHG, if an employee is entitled to a pay in 4 particular scale, higher pay in the next pay scale of the Said category/post shall have to Page 9 of 37 Downloaded on : Sun Jan 16 06:32:14 IST 2022 C/SCA/8455/2017 JUDGMENT DATED: 06/08/2021 be paid to the said employee. It is submitted that, in the year 1985, there was less development in Panandhro and because of several factors, employees were being faced with several difficulties. There were less facilities of transportation, medical, education, etc. Employees were therefore reluctant to go to Panandhro. Therefore, management introduced PHG and thereby employees working there shall be granted one step ahead pay than the actual pay. It is submitted that by the passage of time, Panandhro came to be fully developed and all ' facilities came to be made available. The employees shown their reluctance to move from Panandhro. It is submitted that by Circular dated 15.02.2016 said PHG was withdrawn and all the employees were put at par with other employees working at other Thermal Power Stations. The said Circular is under challenge before Industrial Tribunal.
7.It is submitted that while re-fixing the pay after withdrawal of PHG, it came to the notice of the respondent authorities that in cases of petitioners, while fixing their pay, certain basic mistake has crept in. It has been noticed that while releasing notional increment at the time of pay fixation due to promotion. At this stage following policy of respondent company for grant of Panandhro higher grade (PHG scale), promotion, sixth pay fixation, yearly increment and higher, grade rules under GSO 334 is required to be taken in to consideration. It is submitted that GSECL, KLTPS employees had been given the Page 10 of 37 Downloaded on : Sun Jan 16 06:32:14 IST 2022 C/SCA/8455/2017 JUDGMENT DATED: 06/08/2021 benefit of the Next Higher Grade i.e. Panandhro Higher Grade (PHG Scale) as per the circulars 179 dtd. 20.02.1985, 136 dtd. 25.01.1991 and 1069 dtd. 22.11.1991. This benefit was given up to 31.03.2016 and the benefit was discontinued by issuing notice under Section 9-A to the unions/associations. According to the PHG benefit the employees working at KLTPS, their pay were fixed in the next higher scale compare to the employees working in the same posts other than KLTPS, GSECL. As per para "2" of the! circularl79 dtd. 20.02.1985 the benefit of PHG shall be available to the employees of KLTPS so long they are working at KLTPS and they will be reverted to their original scale as soon as they are transferred to elsewhere from KLTPS. Hence as per above when an employee initially appointed or. transferred to KLTPS, his pay at KLTPS was fixed in the next scale to his original scale of that post and when transferred to elsewhere again he was put in his original scale. When the employees working at KLTPS become eligible for promotion, their pay were to be fixed in line with the employees at other TPS in their original scale and the benefit of PHG scale was to be given to their pay fixed on their original scale avoid any kind of anomaly in pay when they are reverted to their original Scale on transfer to elsewhere from KLTPs. The fixation of pay on getting promotion is done as per Service Regulation 102
(b). That is! one notional increment is given in the Scale of his lower post and pay is fixed in the scale of new post of higher scale. It is submitted that 6th pay commission was due Page 11 of 37 Downloaded on : Sun Jan 16 06:32:14 IST 2022 C/SCA/8455/2017 JUDGMENT DATED: 06/08/2021 w.e.f.01.01.2006 and was implemented on 01.07.2009 for all power stations under GSECL.
For calculation of 6 pay basic on 01.01.2006 the 5° pay basic as on 01.01.2006 was considered. In the formula for pay fixation given by corporate office the step of 03% increment was also given from 2006 to 2009. The above formula was set in the company's e-urja system for calculation of arrears. It is implemented at all power stations of GSECL. Yearly regular increments are given in the scale employees working years per Service Regulation 104. In the 9 years the Higher Grade rules once the benefit of the scheme is given and pay is fixed under scheme, the next increment would be due after 12 months after date of such fixation. Copy of GS0O-334 and 247 attached. The, release of yearly increment is governed by Service Regulating 104.
8.The petitioners herein have been granted wrong benefit because of wrong pay fixation either on the count of wrong release of increment on account of release of increment on account of promotion, wrong release of | increment after grant of higher pay scale, wrong pay fixation and/or wrong absorption on account of promotion. It is submitted that petitioners no. 2, 3, 5, 6, 8, 9, 11, 12, 13, 14, 15, 18,:°19, 20 and 21 have been released increment in PHG and thereafter fixed in scale of promotional post. The following mistake occurred in their cases.
a) The employees in the SCA 8455/2017 and shown in the list of (A) are promoted between Page 12 of 37 Downloaded on : Sun Jan 16 06:32:14 IST 2022 C/SCA/8455/2017 JUDGMENT DATED: 06/08/2021 01.01.2006 to 01.07.2009.
b) Due to promotion their notional increment as per SR 102(b) was required to be released in, their original scale of lower post and then 4 pay was required to be fixed in original scale of promoted post. After fixing the pay in the scale of promoted post the pay in pay scale was to be fixed. However their notional increment as per SR 102(b) was directly released in their PHG scale of lower post and pay fixed directly in PHG, scale of higher post.
c)The fixation of pay on promotion was required to be done in original scale only because when such employee get transfer from KTPS to other TPS they are to be put in their original scale only.
d)Due to this the benefit equal to 3% more basic pay was given and on the basic pay fixed other allowances and overtime was given on more basic.
e)Hence to correct the basic pay in PHG as well as in original pay on the day of Promotion modification orders issued to all employees of (A) and further orders of discontinue of PHG issued the orders issued and correct basic pay on the day of discontinue of PHG derived i.e, on 01.04.2016.
f)As on date they are working in their Page 13 of 37 Downloaded on : Sun Jan 16 06:32:14 IST 2022 C/SCA/8455/2017 JUDGMENT DATED: 06/08/2021 original scale due to discontinue of PHG.
9.In cases of petitioner no.1, 4 & 17 wrong' release of increment has resulted in recovery. Following mistake occurred in their cases.
a) In the 9 years Higher Grade rules once the benefit of the scheme is given and pay is fixed under the scheme, the next increment would be due after 12 months after date of such fixation. The release of yearly increment is governed by Service Regulating 104.
b) The said employees in this petition are given the Higher grade benefit under 9 years rules under GSO-247 before 01.01.2006 i.e. implementation of 6th pay commission.
c) After granting higher grade their regular yearly increment was required to be released after 12 month. That is the increment is to be released in the month in which the higher grade is granted after 12 months. However their increment was released before 12 months after granting higher grade, that is in the month in which drawing increment before granting higher grade.
d) Further, the effect of leave without pay (LWP) was not considered properly as per SR 104 and therefore the same came to be done in the new order issued. Hence Increment was to be delayed and accordingly for early release Page 14 of 37 Downloaded on : Sun Jan 16 06:32:14 IST 2022 C/SCA/8455/2017 JUDGMENT DATED: 06/08/2021 of increment recovery has been affected.
e) In the case of Mr. S.B. Dave due to change in the increment month the pay is also changed on 01.01.2006 on 6 pay fixation hence order no. 3808 dtd. 20.05.2016 of increment and order no. 3672 dtd. 19.05.2016 modification order issued.
f) Order no. 3938 dtd. 26.05.2016 of discontinue of PHG issue as per Circular no GSECL/HR/121 dtd. 15.02.2016.
g) After issuing above all orders in the case of Mr. S.B. Dave the regular increment order dtd. for the year 2016 vide no. 3895 dtd. 25.05.2016 issued.
h) In the case of H N Rana the increment month, is corrected as after granting higher grade under 9 years rules same as in the case of r B Dave. However the same is not affected the pay on 01.01.2006 for fixation of pay in 6% pay. Hence no modification order of fixation issued of fixation. Only increment month revised.
i) The case of B D Gadhvi is similar to Mr. S.B. Dave. That is wrong periodical increment month taken after granting Higher grade in 9 years rules. Hence increment month corrected vide order no. 5531 dtd. 19.07.2016. which affected 6 pay fixation basic hence order no. 5531 issued. Later on, vide order no. 7484 Page 15 of 37 Downloaded on : Sun Jan 16 06:32:14 IST 2022 C/SCA/8455/2017 JUDGMENT DATED: 06/08/2021 dtd. 06.10.2016 increment w.e.f. 06.01.11 revised. Hence, recovery affected.
10. In cases of petitioners no. 7 & 10 following mistakes occurred.
a) The employees in the SCA 8455/2017 shown on the date of their promotion wrong basic was taken for the fixation o¢ pay on promotional post.
b) In the case of H V Patel was Promoted to the post of Sr. Electrician from Electrician Gr.-I and the circular no, GSECL/HRD/II/ dtd. 27.09.2005 for the, eligible grade was ignored and wrong basic and scale was taken at the time of promotion to fix his salary.
c) Hence order no. 1053 dtd. 29.01.2013 is issued to correct the scale and pay for fixation on promotional post on the day of promotion.
d) However, the fitment of pay is done at lesser amount compared to the pay he was drawing in wrong scale hence recovery is affected.
e) In this case wrong fixation is done considering wrong original scale for promotional post.
f) In the case of G P Jadeja wrong, basic pay was taken for promotion on 10.05.2007 that Page 16 of 37 Downloaded on : Sun Jan 16 06:32:14 IST 2022 C/SCA/8455/2017 JUDGMENT DATED: 06/08/2021 which is corrected and due to that modification order of GOS-I required to issue.
11. In case of Petitioner no. 16 following mistake occurred,
a) In the case of Mr. R.S. Chauhan he was drawing Higher Grade under 9 years rules as per GSO-334 since 05.01.2004. Then he was appointed to the higher post on 10.05.2007.
b) As per rules of fixation after granting Higher grade if the employee is promoted: to the scale in which he was drawing higher grade, no additional SR 102 (b) to be released in the lower post scale. As it is already released on granting higher grade under 9 years scheme in the same scale as per para 11 of GSO-334.
c) However Shri R.S. Chauhan additionally got benefit of SR 102 (b) on implementing 6 pay fixation as the step is given in the formula while implementing GSO-I.
12. It is submitted that in some cases it came to the notice that several employees were by mistake paid less. In case of one Shri A.A. Yamani who was paid less amount of Rs.01,32, 438.07 Ps., has been made payment of the said amount. Several such instances have been noticed and short payments have Page 17 of 37 Downloaded on : Sun Jan 16 06:32:14 IST 2022 C/SCA/8455/2017 JUDGMENT DATED: 06/08/2021 been made good by the respondents. So far as petitioners are concerned, they were made wrongful payment because of! mistake and that is how impugned order has been passed. It is submitted that before the respondents issued separate order with regard to recovery, petition has been filed by the petitioners."
8.4 Learned Advocate Mr. Dave therefore submitted that the respondents have implemented the recommendations of the Sixth Pay Commission on 1st July, 2009, giving effect from 1st January, 2006 and at that time, several separate forms were obtained from the employees with regard to the implementation of the GSO-I, which governs the 6th pay-scale and the petitioners have accepted the terms and conditions of the GSO-I by giving consent letters. It was therefore submitted that as per GSO-334, which governs the higher pay-scale, the employees have acknowledged that any wrongful payment made to them, they are bound to refund the same.
8.5 It was further submitted that the Respondent- Company is governed by the Industrial Disputes Act, 1947 (in brief, 'the ID Act'), and the petitioners have signed settlements from time to time, as per the provisions of the ID Act, which is binding upon the petitioners and therefore if any wrongful payments is made to the petitioners, they are bound to refund the same.
Page 18 of 37 Downloaded on : Sun Jan 16 06:32:14 IST 2022C/SCA/8455/2017 JUDGMENT DATED: 06/08/2021 8.6 It was submitted that the petitioners wrongly paid the amounts in view of the fact that their increments were released as per PHG Scheme scale instead of their original scales, as per GSO-I, and therefore, the petitioners are bound to refund the excess payment made to them under the PHG Scheme pay- scale.
8.7 In support of these averments, learned Advocate Mr. Dave placed reliance on the decision of the Supreme Court in the case of 'Chandi Prasad Uniyal & Others Vs. State of Uttarakhand & Others'2, where, the Apex Court has observed and held as under:
"8. 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.
9. 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 2 2012 (8) SCC 417;Page 19 of 37 Downloaded on : Sun Jan 16 06:32:14 IST 2022
C/SCA/8455/2017 JUDGMENT DATED: 06/08/2021 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.
10. 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.
11. 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:Page 20 of 37 Downloaded on : Sun Jan 16 06:32:14 IST 2022
C/SCA/8455/2017 JUDGMENT DATED: 06/08/2021 "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."
12. 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:
Page 21 of 37 Downloaded on : Sun Jan 16 06:32:14 IST 2022C/SCA/8455/2017 JUDGMENT DATED: 06/08/2021 "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.
(emphasis added)"
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.Page 22 of 37 Downloaded on : Sun Jan 16 06:32:14 IST 2022
C/SCA/8455/2017 JUDGMENT DATED: 06/08/2021
13. 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.
14. 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 Page 23 of 37 Downloaded on : Sun Jan 16 06:32:14 IST 2022 C/SCA/8455/2017 JUDGMENT DATED: 06/08/2021 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.
15. We are, therefore, of the considered view that except few instances pointed out in Syed Abdul Qadir case (supra) and in Col. B.J. Akkara (retd.) case (supra), the excess payment made due to wrong/irregular pay fixation can always be recovered.
16. Appellants in the appeal will not fall in any of these exceptional categories, over and above, there was a stipulation in the fixation order that in the condition of irregular/wrong pay fixation, the institution in which the appellants were working would be responsible for recovery of the amount received in excess from the salary/pension. In such circumstances, we find no reason to interfere with the judgment of the High Court. However, we order the excess payment made be recovered from the appellant's salary in twelve equal monthly installments starting from October 2012."
8.8 Learned Advocate Mr. Dave also relied on the decision of the Apex Court in the case of 'High Court of Panjab & Haryana & Others Vs. Jagdev Singh'3, 3 (2016) 14 SCC 267;
Page 24 of 37 Downloaded on : Sun Jan 16 06:32:14 IST 2022C/SCA/8455/2017 JUDGMENT DATED: 06/08/2021 where the Apex Court held as under;
"7 The Respondent challenged the action for recovery in writ proceedings under Article 226. The petition was allowed by the impugned judgment of the High Court. The High Court found substance in the grievance of the Respondent that the excess payment made to him towards salary and allowance prior to his retirement could not be recovered at that stage, there being no fraud or misrepresentation on his part.
8 The order of the High Court has been challenged in these proceedings. From the record of the proceedings, it is evident that when the Respondent opted for the revised pay scale, he furnished an undertaking to the effect that he would be liable to refund any excess payment made to him. In the counter affidavit which has been filed by the Respondent in these proceedings, this position has been specifically [1]admitted. Subsequently, when the rules were revised and notified on 7 May 2003 it was found that a payment in excess had been made to the Respondent. On 18 February 2004, the excess payment was sought to be recovered in terms of the undertaking.
9 The submission of the Respondent, which found favour with the High Court, was that a payment which has been made in excess cannot be recovered from an employee who has retired from the service of the state. This, in our view, will have no application to a situation such as the present Page 25 of 37 Downloaded on : Sun Jan 16 06:32:14 IST 2022 C/SCA/8455/2017 JUDGMENT DATED: 06/08/2021 where an undertaking was specifically furnished by the officer at the time when his pay was initially revised accepting that any payment found to have been made in excess would be liable to be adjusted. While opting for the benefit of the revised pay scale, the Respondent was clearly on notice of the fact that a future re-fixation or revision may warrant an adjustment of the excess payment, if any, made.
10 In State of Punjab & Ors. etc. vs. Rafiq Masih (White Washer) etc1. this Court held that while it is not possible to postulate all situations of hardship where payments have mistakenly been made by an employer, in the following situations, a 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 Page 26 of 37 Downloaded on : Sun Jan 16 06:32:14 IST 2022 C/SCA/8455/2017 JUDGMENT DATED: 06/08/2021 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." (emphasis supplied).
11 The principle enunciated in proposition (ii) above cannot apply to a situation such as in the present case. In the present case, the officer to whom the payment was made in the first instance was clearly placed on notice that any payment found to have been made in excess would be required to be refunded. The officer furnished an undertaking while opting for the revised pay scale. He is bound by the undertaking.
12 For these reasons, the judgment of the High Court which set aside the action for recovery is unsustainable. However, we are of the view that the recovery should be made in reasonable installments. We direct that the recovery be made in equated monthly installments spread over a period of two years.
13 The judgment of the High Court is accordingly set aside. The Civil Appeal shall stand allowed in the above terms. There shall be no order as to costs."
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9. Having heard the learned Advocates for the parties and having perused the material on record, the short question that needs to be answered in this petition is as to whether, the respondents can recover the amount of salary paid to the petitioners prior to the modification of the pay-scale.
9.1 The facts are not in dispute. The petitioners were granted the benefit of Sixth pay-scale, as per GSO-I on the pay-scale, which they were having at the relevant point of time with effect from 1 st January, 2006. Subsequently, the pay-scale of the petitioners was modified in the year 2016 on withdrawal of the PHG Scheme by the respondents, which resulted into excess payment of salary as per the revised pay-scale calculated as per GSO-I. The respondents have therefore effected recovery of the excess amount paid to the petitioners from 1st January, 2006 on the revised pay-scale relying upon the Clause-36 of the GSO-I, which reads as under:
"36.0 Any wrongful payment made to employee / officer pursuant to these orders or any other justified action of the company, being public money, the same shall be recovered in suitable equal installments. Further those of the employees / officers who have been charge-sheeted for loss to the companies, misappropriation etc. the amount of loss / misappropriation shall be recovered from arrears payment and / or other sources. Such disciplinary action cases shall be Page 28 of 37 Downloaded on : Sun Jan 16 06:32:14 IST 2022 C/SCA/8455/2017 JUDGMENT DATED: 06/08/2021 finalized preferably within on year from the date of this GSO."
9.2 On perusal of Clause-36 of the GSO-I, it provides that respondents can recover any wrongful amount paid to the employees or officer pursuant to GSO-I or any other justified action of the respondent-Comapny in suitable equal installments. In the facts of the present case therefore it is necessary to consider as to whether Clause-36 of GSO- I would be applicable in this case or not?
9.3 On perusal of the recovery orders which are placed on record, it appears that the recovery is ordered from the year 2001 onwards and therefore, GSO-I, Dated: 1st July, 2009, cannot be made applicable in the facts of the present case. Moreover, only because the pay-scale as per PHG Scheme is withdrawn and modified by the respondent - Company, it cannot be said that there is wrongful payment to the petitioners as per Clause-36 of GSO-1.
9.4 This Court in the case of 'Dolatsingh Sardarsingh Sindha and Others' (Supra) has observed and held as under:
6. It is an undisputed position that the pay-
scales were revised by the competent authority at the relevant point of time much prior to the date of retirement and if the period is roughly considered, it is in any case more than 2 years in Page 29 of 37 Downloaded on : Sun Jan 16 06:32:14 IST 2022 C/SCA/8455/2017 JUDGMENT DATED: 06/08/2021 every case. It is not on account of any misrepresentation on the part of any of the petitioners that the higher pay-scale was granted. The higher pay-scale already granted to the respective petitioners are withdrawn on account of the fact that the petitioners concerned were not possessing the requisite educational qualification for the higher pay-scale. It is also an admitted position that the respective petitioners were working as Peons, which is Class-IV category. It is also an admitted position that the respective petitioners had already retired more than 2 years back and thereafter, the order of recovery has been passed.
7. In my view, the issue is no more res integra and the legal position on the aspect of recovery on the ground which cannot be attributed to the employee concerned is settled by the decision of the Apex Court in the case of State of Punjab vs. Rafiq Masih reported at 2014(14) SCALE 300, wherein the Apex Court has summarised the case where the recovery is impermissible. Paragraph 12 of the aforesaid decision, which includes the concluding observation, reads as under:
Page 30 of 37 Downloaded on : Sun Jan 16 06:32:14 IST 2022C/SCA/8455/2017 JUDGMENT DATED: 06/08/2021 "12. 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 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 Page 31 of 37 Downloaded on : Sun Jan 16 06:32:14 IST 2022 C/SCA/8455/2017 JUDGMENT DATED: 06/08/2021 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. If the facts of the present cases are examined in light of the above referred decision of the Apex Court, condition no.1 is satisfied inasmuch as the petitioners were working as Peon which is a class IV service of the respondent. Further, condition no.2 is also satisfied that the recovery from the retired employee is impermissible.
9. Ms. Desai, learned counsel appearing for the respondent attempted to contend that similar recovery orders were passed in respect of large number of employees who were not holding the qualification and they have accepted the order but the petitioners have challenged the said order and therefore, it was submitted that if the recovery is made impermissible, it may create further complications.
10.In my view, such contention cannot be countenanced for the simple reason that when the issue is already covered by the Page 32 of 37 Downloaded on : Sun Jan 16 06:32:14 IST 2022 C/SCA/8455/2017 JUDGMENT DATED: 06/08/2021 above referred decision of the Apex Court and the recovery orders cannot be sustained in the eyes of law, they would be required to be quashed and set aside. Whether other employees have accepted or not would not be a ground to deny the relief to the petitioners when the highest Court of the land has already taken such view which supports the case of the petitioners. Hence, the said contention cannot be accepted.
11.In view of the aforesaid, when the issue is already covered by the above referred decision of the Apex Court, the impugned orders for recovery of the amount of difference of the payscale from AnnexureA to AnnexureE cannot be sustained in the eye of law. Hence, they deserve to be quashed and set aside and are quashed and set aside.
12. Mr. Mishra, learned counsel appearing for the petitioners submitted that the recovery is already effected. Hence, when the impugned orders are quashed and set aside, it is further directed that the amount already recovered pursuant to the impugned order shall be refunded to the petitioners within a period of four weeks from the receipt of the order of this Court.
13. Petitions are allowed to the aforesaid extent.
Page 33 of 37 Downloaded on : Sun Jan 16 06:32:14 IST 2022C/SCA/8455/2017 JUDGMENT DATED: 06/08/2021 Rule made absolute accordingly. Considering the facts and circumstances, no order as to costs."
9.5 In the aforesaid decision, this Court considered the decision of the Apex Court in the case of 'State of Punjab & Others Vs. Raifq Masih (White Washer) And Others' (Supra), holding that the issue is squarely covered by the decision of this Court and the recovery orders cannot be sustained in the eye of law. Therefore, the reliance placed on behalf of the respondents on the decision of the Apex Court in the case of 'High Court of Panjab & Haryana & Others' (Supra) shall not be applicable in the facts of this case. Since, in the said case the Apex Court observed that the officer to whom the payment was made in the first instance was clearly paid on the notice that any payment made in excess would be required to be refunded and an undertaking was also furnished by the concerned officer while obtaining revised pay-scale and therefore he was bound by such undertaking. Thus, it was in the facts of that particular case the Apex Court held that the circumstances under which the recover of excess amount paid to the concerned employee / officer is recoverable in the post retirement period.
9.6 Similarly, in the case of 'Chandi Prasad Uniyal & Others' (Supra), the Apex Court, in the facts of the said case, came to the conclusion that the excess payment made due to wrongful pay fixation can always be recovered and the appellants before the Apex Court did not fall into any of the exceptional categories.
Page 34 of 37 Downloaded on : Sun Jan 16 06:32:14 IST 2022C/SCA/8455/2017 JUDGMENT DATED: 06/08/2021 However, the aforesaid judgment was later on cited before the Apex Court in the case of 'State of Punjab & Others Vs. Raifq Masih (White Washer) And Others' (Supra), where the Apex Court held as under:
"12. 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 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."
9.7 On perusal of the findings arrived at by the Page 35 of 37 Downloaded on : Sun Jan 16 06:32:14 IST 2022 C/SCA/8455/2017 JUDGMENT DATED: 06/08/2021 Apex Court in the case of 'State of Punjab & Others Vs. Raifq Masih (White Washer) And Others' (Supra), the case of the petitioner would fall in Clause(1), i.e. recoveries from the employees belonging to Class-III and Class-IV and therefore the respondents cannot effect the recovery from the petitioners, who are belonging to Class-III and Class-IV cadre.
10. For the foregoing reasons, this petition succeeds and is allowed and the impugned order passed by the respondents for recovery of amount due to difference in pay-scales of the petitioners, as per the orders Annexures- A to U to this petition cannot be sustained in the eye of law and are quashed and set aside.
10.1 It is made clear that this Court has not gone into the merits of revising pay-scale of the petitioners and the same shall be subject to the rights of the petitioners to challenge the same in appropriate proceedings. Moreover if any amount has already been recovered by the respondents from the petitioners, the same shall be refunded to the concerned petitioners within the period of eight Page 36 of 37 Downloaded on : Sun Jan 16 06:32:14 IST 2022 C/SCA/8455/2017 JUDGMENT DATED: 06/08/2021 weeks from the date of receipt of a copy of this order.
10.2 Further, as directed by this Court vide order dated 12th January, 2018, the amount of Rs.82,940.91/-
deposited by the respondents before the Registry of this Court and which has been invested in the FDRs shall be paid to Petitioner No.3 by way of an account payee cheque on due verification, after the amount is realized from the FDRs along with the interest accrued thereon.
Rule is made absolute. No order as to costs. Direct service is permitted.
Sd./-
(BHARGAV D. KARIA, J) UMESH/-
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