Himachal Pradesh High Court
Bhag Chand vs Of on 28 September, 2023
Author: Vivek Singh Thakur
Bench: Vivek Singh Thakur
1 IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA .
CWPOA No.6244 of 2020 Reserved on : 08.09.2023 Date of Decision : 28th September, 2023 __________________________________________________ Bhag Chand ...... Petitioner Vs. of State of Himachal Pradesh and others ......Respondents ____________________________________________________ rt Coram:
The Hon'ble Mr. Justice Vivek Singh Thakur, Judge The Hon'ble Mr. Justice Bipin Chander Negi, Judge Whether approved for reporting?1 Yes For the Petitioner : Ms. Babita and Mr. Bonit Prakash, Advocates, vice Mr. A.K. Gupta, Advocate.
For the Respondents : Mr. Anup Rattan, Advocate General with Mr. Manoj Chauhan, Additional Advocate General.
____________________________________________________ Bipin Chander Negi, Judge The petitioner in the present case (Junior Engineer Class-
III), was given monetary benefits, which were in excess of the 1 Whether reporters of Local Papers may be allowed to see the judgment?::: Downloaded on - 28/09/2023 20:36:32 :::CIS 2
petitioner's entitlement. These benefits flowed to the petitioner, consequent upon a mistake committed by the competent authority .
concerned, in determining the emoluments payable to the petitioner. The mistake occurred on account of reason of wrong pay fixation, than in consonance of the right of the employee of concerned, for which the employee concerned was not entitled.
The aforesaid wrongful benefits were given to the petitioner w.e.f.
2006. The over payments in this respect were detected in rt December 2017. The long and short of the matter is, that the petitioner was a beneficiary of a mistake committed by the employer, and on account of the said unintentional mistake, the employee was in receipt of monetary benefits, beyond what was due.
2. Another essential factual component of the case is that the petitioner employee was not guilty of furnishing any incorrect information, which had led the competent authority concerned, to commit the mistake of making a higher payment to the employee.
The payment of higher dues to the petitioner was not on account of any misrepresentation made by the petitioner, nor was it on account of any fraud committed by the petitioner. Any participation of the petitioner, in the mistake committed by the employer, in ::: Downloaded on - 28/09/2023 20:36:32 :::CIS 3 extending the undeserved monetary benefits to the petitioner-
employee, is totally ruled out. It would, therefore, not be incorrect .
to record that the petitioner was as innocent as his employer, in the wrongful determination of the petitioner's inflated emoluments.
3. The issue that we have been required to adjudicate is, of whether the petitioner, against whom an order of recovery (of the excess amount) has been made, should be exempted in law, from the reimbursement of the same to the employer. For the rt applicability of the instant order, and the conclusions recorded by us hereinafter, the ingredients depicted in the foregoing two paragraphs are essentially indispensable.
4. The counsel for the petitioner has argued that restraining back recovery of excess payment, is granted by courts not because of any right in the employee, but in equity, in exercise of judicial discretion to relieve the employee 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 ::: Downloaded on - 28/09/2023 20:36:32 :::CIS 4 to him, relief therefore be granted in that behalf. It is further argued that in the case at hand such recovery would be iniquitous .
and arbitrary and therefore would also breach the mandate contained in Article 14 of the Constitution of India. Reliance in this regard is placed on State of Punjab v. Rafiq Masih, (2015) 4 of SCC 334 : (2015) 2 SCC (Civ) 608 : (2015) 2 SCC (L&S) 33.
5. Per contra the learned Advocate General has argued that the observations made by the Apex Court not to recover the rt excess amount paid to the appellant therein were in exercise of its extraordinary powers under Article 142 of the Constitution of India which vest the power in the Apex Court to pass equitable orders in the ends of justice. It has further been argued that the directions issued under Article 142 do not constitute a binding precedent unlike Article 141 of the Constitution of India. In this regard reliance has been placed on State of Punjab v. Rafiq Masih, (2014) 8 SCC 883 : (2014) 3 SCC (L&S) 134 : (2014) 6 SCC (Cri) 154 : (2014) 4 SCC (Civ) 657.
6. Besides the aforesaid strong reliance has been placed upon the judgement titled as Chandi Prasad Uniyal v. State of Uttarakhand, (2012) 8 SCC 417 : (2012) 4 SCC (Civ) 450, wherein excess salary was paid due to irregular/wrong pay ::: Downloaded on - 28/09/2023 20:36:32 :::CIS 5 fixation by the District Education Officer concerned.Therein when the revised pay scale/pay fixation was fixed on the basis of the 5th .
Central Pay Scale, a condition was superimposed which reads as follows:-
"In the condition of irregular/wrong pay fixation, the institution shall be responsible for recovery of the of amount received in excess from the salary/pension."
7. rt The petitioners were further bound by that condition as well.
In the aforesaid backdrop the question that arose was whether the petitioners can retain the amount received on the basis of irregular/wrong pay fixation in the absence of any misrepresentation or fraud on their part.
8. On the strength of the aforesaid it is sought to be argued that in the case at hand a similar condition has been superimposed whereby if later on it is discovered that any excess payment has been made than in that event the employee undertakes to reimburse the same.
9. The first argument raised by the Learned Advocate General is without any substance as law declared in State of Punjab v.
Rafiq Masih, (2015) 4 SCC 334 is not a direction issued under ::: Downloaded on - 28/09/2023 20:36:32 :::CIS 6 Article 142 of the Constitution of India. More so in view of the fact that in State of Punjab v. Rafiq Masih, (2015) 4 SCC 334 :
.
(2015) 2 SCC (Civ) 608 : (2015) 2 SCC (L&S) 33, the Hon'ble court has noticed the reference made by a Division Bench of two Judges of the Apex Court, for consideration by a larger Bench:
of (Rakesh Kumar case 2014 (8)SCC 892, SCC p. 893, para 2). It was further categorically noticed that while disposing of the reference, the three-Judge Division Bench, recorded the following rt observations in para 6: (Rafiq Masih case, SCC pp. 888-89) "6. In our considered view, the observations made by the Court not to recover the excess amount paid to the appellant therein were in exercise of its extraordinary powers under Article 142 of the Constitution of India which vest the power in this Court to pass equitable orders in the ends of justice."
10. Having recorded the above observations, the reference was answered as under: (Rafiq Masih case, SCC p. 891, paras 13-14) "13. Therefore, in our opinion, the decisions of the Court based on different scales of Article 136 and Article 142 of the Constitution of India cannot be best weighed on the same grounds of reasoning ::: Downloaded on - 28/09/2023 20:36:32 :::CIS 7 and thus in view of the aforesaid discussion, there is no conflict in the views expressed in the first two .
judgments, and the latter judgment.
14. In that view of the above, we are of the considered opinion that reference was unnecessary.
Therefore, without answering the reference, we send back the matters to the Division Bench for of their appropriate disposal."
(emphasis supplied)
11. Thereafter the Hon'ble Apex Court has held as under:
rt "10... ... ... 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."
12. The second argument raised by the Learned Advocate General also deserves to be rejected on account of the law laid down in Chandi Prasad Uniyal v. State of Uttarakhand, (2012) 8 SCC 417 : (2012) 4 SCC (Civ) 450 itself. The relevant extract of which is being reproduced here-in-below:
::: Downloaded on - 28/09/2023 20:36:32 :::CIS 8"14. ... ... ... Any amount paid/received without the 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 of except few instances pointed out in Syed Abdul Qadir case and in Col. B.J. Akkara case, the excess payment made due to wrong/irregular pay fixation rt can always be recovered.
16. The 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."
13. From the aforesaid, it is evident that 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 cause if recovery is ordered. In the aforesaid case of Chandi Prasad Uniyal (supra), no relief was granted to the petitioners therein as they did not fall in the exceptions of extreme hardship. Besides the aforesaid, ::: Downloaded on - 28/09/2023 20:36:32 :::CIS 9 over and above, there was a stipulation in the fixation order that in the case of irregular/wrong pay fixation, the institutions in which .
they were working would be responsible for recovery of the amount received in excess from their salary/pension. Even, if there had been no stipulation in the fixation order, there can be no of dispute with the proposition that w.r.t. any amount paid/received without the authority of law, the employer has a right to recover the same barring few exceptions of extreme hardship.
rt
14. Learned Advocate General has placed reliance upon the decision of the Hon'ble Apex Court in High Court of Punjab and Haryana and others vs. Jagdev Singh reported in (2016) 14 SCC 267, wherein the Officer concerned was seeking protection on account of the fact that he was due to retire within one year of the order of recovery. In the said case, the Officer to whom the payment had been 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 employee therein was a Judicial Officer and not a Class-III/Class-IV employee. The revised pay scale therein had been granted to the employee on 07.01.2002. Recovery thereof was initiated on 18.02.2004. In the aforesaid backdrop, the Apex Court held that the Officer who was ::: Downloaded on - 28/09/2023 20:36:32 :::CIS 10 to retire within one year of the order of recovery, in view of the undertaking given was not entitled to protection against the .
recovery made by the employer. Right to recover therein also existed irrespective of the undertaking, therefore, the aforesaid right of the employer was pitted with the extreme hardship caused of to the employee. The scales tilted in favour of the employer. The aforesaid case is clearly distinguishable as in the case at hand employee belongs to Class-III category. The wrongful benefits rt were given to the petitioner in the case at hand w.e.f. 2006. The over payments in this respect were detected in December, 2017.
Hardship is writ large in the case at hand.
15. As rightly pointed out by the counsel for the petitioner the issue in question is no longer res-integra in view of the authoritative pronouncement of the apex Court in State of Punjab v. Rafiq Masih, (2015) 4 SCC 334 : (2015) 2 SCC (Civ) 608 :
(2015) 2 SCC (L&S) 33, wherein Chandi Prasad Uniyal (supra) has also been considered, the relevant extract whereof is being reproduced here-in-below:-
"6. In view of the conclusions extracted hereinabove, it will be our endeavour, to lay down the parameters of fact situations, wherein ::: Downloaded on - 28/09/2023 20:36:32 :::CIS 11 employees, who are beneficiaries of wrongful monetary gains at the hands of the employer, may .
not be compelled to refund the same. In our considered view, the instant benefit cannot extend to an employee merely on account of the fact, that he was not an accessory to the mistake committed by the employer; or merely because the employee of did not furnish any factually incorrect information, on the basis whereof the employer committed the mistake of paying the employee more than what rt was rightfully due to him; or for that matter, merely because the excessive payment was made to the employee, in absence of any fraud or misrepresentation at the behest of the employee.
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 the 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 ::: Downloaded on - 28/09/2023 20:36:32 :::CIS 12 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 of hands of this Court.
8. ... ... ... The right to recover being pursued by the employer, will have to be compared, with the rt 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. ... ... ...
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 ::: Downloaded on - 28/09/2023 20:36:32 :::CIS 13 situations, wherein recoveries by the employers, would be impermissible in law:
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"(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 of the order of recovery.
(iii) Recovery from the employees, when the excess payment has been made for a period in excess of rt 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."
16. In the case at hand the petitioner would fall in the exceptional categories: (i) and (iii) mentioned herein above. The petition is hence allowed. The recovery made is quashed with a further direction to refund the recovery so made within four weeks ::: Downloaded on - 28/09/2023 20:36:32 :::CIS 14 from the passing of the order, failing which, the respondents shall pay interest at the rate of 6% per annum.
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18. The petition is disposed of in the aforesaid terms, so also, the pending miscellaneous application(s), if any.
of
( Vivek Singh Thakur)
Judge
rt ( Bipin Chander Negi)
th
28 September, 2023 (KS) Judge
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