Calcutta High Court (Appellete Side)
Sri Amalendu Chakraborty vs State Of West Bengal And Others on 7 August, 2018
Author: Sambuddha Chakrabarti
Bench: Sambuddha Chakrabarti
IN THE HIGH COURT AT CALCUTTA
CONSTITUTIONAL WRIT JURISDICTION
APPELLATE SIDE
Present:
The Hon'ble Dr. Justice Sambuddha Chakrabarti
W.P. No. 25189 (W) of 2017
Sri Amalendu Chakraborty
Versus
State of West Bengal and Others.
For the petitioner : Mr. Manas Kumar Ghosh, Advocate
Ms. Susmita Dey (Basu), Advocate
For the CSTC : Mr. Amal Kumar Sen, Advocate
Mr. Sabyasachi Mondal, Advocate
Heard on : 31.10.2017, 02.01.2018, 16.02.2018,
11.05.2018
Judgement on : 07.08.2018
Sambuddha Chakrabarti, J.:
The short question that crops up for consideration in this writ petition is whether recovery of overpayment made to the petitioner by Calcutta State Transport Corporation, i.e., respondent no. 2 is justified.
The petitioner was an employee of the respondent no. 2 and he retired from service on February 28, 2015. Although he had received the provident fund dues in time but no payment was made on account of gratuity and leave salary. Earlier he filed a writ petition which was disposed of by this Court on August 20, 2015 with an observation that an issue sought to be raised in that writ petition was covered by the Scheme for the retired employees of State Transport Undertakings formulated by the Government in terms of the direction contained in the order dated June 13, 2015 passed in W.P. No. 11978 (W) of 2015. As such, this matter would also be governed by the direction passed in that writ petition.
Ultimately, the petitioner was paid a sum of Rs. 2,67,793/- towards gratuity after deducting Rs. 39,125/-. The petitioner has made a grievance that there was an over payment which was recovered from him without assigning any reason and without giving him any opportunity of being heard. Such recovery of alleged over payment had caused him hardship and the over payment was not caused by any act of fraud or misrepresentation by the petitioner, but due to wrong calculation of the respondents. He is, therefore, entitled to get back the amount the money recovered from his gratuity.
The petitioner, therefore, has filed this writ petition, inter alia, praying for a direction upon the respondents to refund the recovered alleged over payment with interest at the rate of 10%.
The Deputy Managing Director of the respondent no. 2 Corporation has filed a report in the form of an affidavit. It has been stated in the said report that the dues on account of the provident fund were paid to the petitioner in time; but payment of gratuity and other retiral benefits were paid to him along with other retired employees of the Corporation in terms of the Scheme framed and approved by the State Government.
The report gives a detailed account of the petitioner's scale of pay for the different posts in which he had worked during his service tenure. Due to unauthorized absence of the petitioner from January 1, 2006 to July 27, 2007 no increment became due to him and his pay ought to have been fixed at the rate as mentioned in the report.
However, at the time of making scrutiny by the audit office at the time of processing his retiral benefit it was detected that he had been inadvertently allowed the pay between April 1, 2008 to July 1, 2012 to which he was not entitled to. As a result, an excess amount of Rs. 39,125/- had been over paid to the petitioner during the said period and this amount has been deducted from the gratuity payable to him. Again, since from April 27, 2013 till the date of his retirement the petitioner remained absent he was not entitled to any further increment.
On behalf of the petitioner a rejoinder has been filed to the report of the respondent corporation. It has been stated that over drawal, if any, was not caused by any fraud or misrepresentation by him as contained in the report. It would be of great hardship to the petitioner if the amount deducted is allowed to be retained by the respondents as the petitioner is not covered under the Death-cum-Retirement Scheme 1990. It appears from the report that an excess amount was paid for a period more than five years before his retirement and the petitioner was never intimated anything about the over payment during his entire service tenure.
In support of his contention, Mr. Ghosh, the learned Advocate for the petitioner relied on the judgment in the case of Syed Abdul Qadir and Others Vs. State of Bihar and Others., reported in 2009 (1) Supreme 163. There also the question that cropped up for consideration was whether recovery of excess payment of emoluments or allowances to the appellants who were the assistant teachers of the Government was justified if such overpayment had not been made on account of any misrepresentation or fraud on the part of the employees. The Supreme Court observed that undoubtedly such excess amount had been paid to the teachers not due to any misrepresentation or fraud on their part and the appellants had no knowledge that the amount that was being paid to them was more than what they were entitled to. The Finance Department in its affidavit also had 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 were not responsible. On the contrary, the whole confusion was because of inaction, negligence and carelessness of the officials of the Government of Bihar. It was submitted on behalf of the appellants that majority of the beneficiaries had either retired or were on the verge of it. The Supreme Court in view of the peculiar facts and circumstances of the case and to avoid any hardship to the teachers, directed that no recovery of the amount that had been paid in excess to them should be made.
Mr. Ghosh next relied on the case of Shyam Babu Verma and Others Vs. Union of India and Others, reported in (1994) 2 SCC 521 for a proposition that if higher scale of pay is erroneously given to the petitioners for no fault of theirs it shall only be just and proper not to recover any excess amount already paid to them. The reasons for the decision of the Supreme Court was that the petitioners were entitled to the lower scale of pay with effect from January 1, 1973 and after a period of 10 years they became entitled to the higher scale of pay but as they had received the higher scale since 1973 due to no fault of theirs and that scale of pay was reduced in the year 1984 with effect from January 1, 1973 it would not be proper to recover the excess amount which have already been paid to the petitioners.
Mr. Ghosh also relied on the case of Sahib Ram Vs. State of Haryana and Others., reported in 1995 Supp (1) SCC 18. There also the Supreme Court restrained recovery of the excess payment already paid which was the result of a wrong construction of the relevant order by the authority without any misrepresentation by the employee.
Relying on these judgments the petitioner argued that since the overpayment had been made by the respondents inadvertently the petitioner was never at fault and, therefore, it would not be proper for the respondents to recover the excess amount paid in favour of the petitioner.
However, it is a very sweeping statement that the Supreme Court all though had restrained authorities from recovering any excess payment improperly made in favour of the employees without any reservation. In the case of Syed Abdul Qadir and Others (Supra) itself the Supreme Court had provided for certain exceptions to the general rule against the recovery of excess payment from an employee, viz., if such excess payment was not paid on account of any misrepresentation or fraud on the part of the employee and if such excess payment was made by the employer by applying a wrong principle for calculating the pay and allowances or on the basis of a particular interpretation of rule or order, which has subsequently been found to be erroneous. The Supreme Court clarified that the relief against recovery has been 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 would be caused by recovery, of the amount. The exceptions conceptualized by the Supreme Court specifically mentioned that 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 where the error was 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.
The issue further came up for judicial consideration in the case of Chandi Prasad Uniyal and Others Vs. State of Uttarakhand and Others., reported in (2012) 8 SCC 417. The Supreme Court after considering a large number of cases on the point was of the considered view that it had never been laid down as a principle of law that only if there was misrepresentation or fraud on the part of the recipients of the money in getting the excess pay, the amount paid due to irregular or wrong fixation of pay would be recovered. In Chandi Prasad Uniyal and Others (Supra) the bench was not convinced that the Supreme Court in various judgments has laid down any proposition of law that if the State or its officials established that there was misrepresentation or fraud on the part of the recipients of the excess pay only then the amount could be recovered. Most of such cases were decided on the peculiar facts and circumstances of those cases. The Supreme Court expressed its concern over the excess payment of public money which is often described as taxpayers' money and which belongs neither to the officers who had effected over payment nor to the recipients. "We fail to see why the concept of fraud or misrepresentation", the Supreme Court observed, "is being brought in such situations. The 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 the 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 and the payee".
In Chandi Prasad Uniyal and Others (Supra), it has further been laid down as a proposition of law that any amount paid or received without any authority of law can always be recovered barring few exceptions of extreme hardships, but not as a matter of right. In such situations law imposes an obligation on the payee to repay the money, otherwise it would amount to just enrichment.
It may be mentioned that a Division Bench of the Supreme Court in connection with a similar matter found apparently different views expressed on the one hand in the case of Shyam Babu Verma (Supra) and Sahib Ram (Supra) and on the other hand in Chandi Prasad Uniyal and Others (Supra) and was of the view that the matters should be placed before a bench of three-judges.
A three-judge Bench of the Supreme Court in the case of State of Punjab and Others Vs. Rafiq Masih (White Washer) reported in (2014) 8 SCC 883, while returning the reference, clarified that the observations made by the Supreme Court in the case of Shyam Babu Verma (Supra) were in exercise of its extraordinary power under Article 142 of the Constitution of India which vests the power in the Supreme Court to pass equitable orders for the ends of justice. So far as the case of Chandi Prasad Uniyal (Supra) is concerned the Supreme Court held that the law laid down there in no way conflicted of the observations made by the Supreme Court in the other cases. In the other cases directions were issued in exercise of the powers under Article 142 of the Constitution of India but in the subsequent decision the Supreme Court in laying down the law has dismissed the petition of the employee.
Since the Supreme Court observed that the reference was unnecessary, the matters were sent back to the regular bench for their disposal. After this, a bunch of appeals were disposed of by the Division Bench of the Supreme Court of State of Punjab and Others Vs. Rafiq Masih (White Washer) and Others, reported in (2015) 4 SCC 334. The Supreme Court after consideration of a number of judgments was of the view that the 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. While explaining the decision in the case of Syed Abdul Qadir (Supra) the Supreme Court observed that 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. At retirement an employee is past his youth, his needs are far in excess of what they were when he was younger and his earnings have substantially dwindled or reduced on his retirement. Keeping this principle in mind, the Supreme Court observed 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, the Supreme Court observed, should be treated as iniquitous.
The Division Bench in the case of State of Punjab and Others Vs. Rafiq Masih (White Washer) and Others. (Supra), took note of certain situations when recovery by the employer would be impermissible in law. They included: i) recovery from the employees belonging to Class III and Class IV service or Group C and Group D service, ii) recovery from retired employees or the employees who were due to retire within one year, iii) recovery from employees when 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 wrongly been required to discharge duties to a higher post and has been paid accordingly, and, v) in any other case where the Court arrives at the conclusion that the recovery if made from the employees 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.
Undoubtedly, in the present case the petitioner retired as a Peon of the Corporation on February 28, 2015. The over payment that had been made by the respondent Corporation related to the period from April 1, 2008 to April 30, 2013 which means that this had continued for more than five years through the admitted inadvertence of the respondents. Moreover, the petitioner retired as the Peon of the Corporation and belonged to Group D service. He having retired in February 2015 the deduction of the amount of over payment from his gratuity must be held to be operating against the petitioner rather too harshly.
Most certainly, the petitioner has no vested right to the amount paid to him in excess of what he was otherwise entitled to. It has also to be recognized as a proposition of law that an employer has also a right to recover any excess payment paid to an employee. But if one balances the comparative hardship between the Corporation and the petitioner, hardship of the petitioner would far outweigh that of the Corporation.
Thus, the case definitely falls within more than one categories delineated by the Division Bench of the Supreme Court in State of Punjab and Others Vs. Rafiq Masih (White Washer) and Others (Supra). In such view of it I am of the considered view that allowing the respondent Corporation to retain the amount would be iniquitous as against a retired Group-D employee who had been paid the gratuity a considerable time after his retirement.
Mr. Sen, the learned Advocate for the respondents submitted that in the second judgment of State of Pubjab and Others Vs. Rafiq Masih (White Washer) and Others (Supra) the Supreme Court did not say anything about the judgment in the case of Chandi Prasad Uniyal (Supra). This is the only judgment which has not been declared by the Supreme Court as passed under Article 142 of the Constitution of India. Therefore, the judgment in the case of State of Pubjab and Others Vs. Rafiq Masih (White Washer) and Others (Supra) cannot override the earlier judgment in Chandi Prasad Uniyal (Supra).
Such submission, I am afraid, does not really advance the case of the respondents and may not be treated to be a justification for recovering the excess amount or to retain the same. A more careful reading of the judgment in Chandi Prasad Uniyal (Supra) clearly shows that the Supreme Court was of the considered view that barring the few situations pointed out in Syed Abdul Qadir and Another (Supra) and in Col. B. J. Akkara Vs. Government of India, reported in (2006) 11 SCC 709 excess payment made due to wrong or irregular pay fixation can always be recovered. The exceptions in the case of Syed Abdul Qadir (Supra) has been referred to in paragraph 12 of the judgment in Chandi Prasad Uniyal (Supra) where the relevant paragraph had been quoted. The Supreme Court added emphasis to a portion quoted from the judgment in Syed Abdul Qadir and Another (Supra) that the learned counsel appearing on behalf of the appellants submitted that the majority of the beneficiaries had either retired or were 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, the Supreme Court was of the view that no recovery of the amount that had been paid in excess to the appellant teachers should be made. Again in the case of Col. B. J. Akkara (Supra), the Supreme Court observed that the relief of restraining recovery of excess payment is granted by Courts not because of any right in the employees, but in equity and an exercise of judicial discretion to relieve the employees from the hardship that would 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 amount will cause undue hardship to him, relief is granted.
If one reads the judgments in the cases of Syed Abdul Qadir (Supra) and Col. B. J. Akkara (Supra) it leaves no room for entertaining any doubt that the petitioner in the present case also qualifies to come in the exceptions mentioned in it, both on account of his being long retired and he being not an accessory to any misrepresentation or fraud. In either case any order allowing the retention of the amount so recovered by the respondents must be held to be operating against a retired Group-D employee of the Corporation rather too harshly. Thus, even if the case of Chandi Prasad Uniyal (Supra) has not been dealt with in the second judgment of State of Punjab and Others Vs. Rafiq Masih (White Washer) (Supra) that will not make any material difference so far as the present case is concerned as in Chandi Prasah Uniyal (Supra) itself the Supreme Court recognized the exceptional situations where recovery of an excess payment may not be proper for a court to order.
For the reasons aforesaid, I find sufficient merit in the contentions of the writ petitioner. I direct the Corporation to refund Rs. 39,125/- representing the amount deducted from the gratuity to the petitioner within a period of four weeks from the date of communication of the order. Such amount shall also carry an interest at the rate of 6% per annum from the date on which the gratuity, after deducting of Rs. 39,125/-, was paid to the petitioner till the actual date of payment of the remaining amount of Rs. 39,125/-.
With the direction as above, the writ petition succeeds. There shall, however, be no order as to costs.
Urgent photostat certified copy of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities.
(Dr. Sambuddha Chakrabarti, J.) S. Banerjee