Gujarat High Court
Ambalal Purshottam Parmar vs Gujarat Water Supply Adn Sewerage Board ... on 19 February, 2016
Author: J.B.Pardiwala
Bench: J.B.Pardiwala
C/SCA/10279/2012 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 10279 of 2012
With
CIVIL APPLICATION NO. 13159 of 2015
In SPECIAL CIVIL APPLICATION NO. 10279 of 2012
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AMBALAL PURSHOTTAM PARMAR....Petitioner(s)
Versus
GUJARAT WATER SUPPLY ADN SEWERAGE BOARD THRO
EXECUTIVE....Respondent(s)
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Appearance:
MR TR MISHRA, ADVOCATE for the Petitioner(s) No. 1
MR MEHUL H RATHOD, ADVOCATE for the Respondent(s) No. 1
RULE SERVED for the Respondent(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA
Date : 19/02/2016
ORAL ORDER
By this writ-application under Article 226 of the Constitution of India, the applicant, a retired employee of the Gujarat Water Supply and Sewerage Board, has prayed for the following reliefs :
"(A) That Your Lordships be pleased to issue an order, direction and/or writ in the nature of certiorari and/or any other appropriate writ, order or direction, quashing and setting aside the impugned recovery being made from the salary of the petitioner, as being illegal, arbitrary, discriminatory and violative of Articles 14 and 16 of the Constitution of India;Page 1 of 15
HC-NIC Page 1 of 15 Created On Sun Feb 28 04:18:43 IST 2016 C/SCA/10279/2012 ORDER (B) Pending admission and final disposal of this petition, Your Lordships be pleased to restrain the respondent, their agent and servant from further recovering the amount from the monthly salary of the petitioner;
(C) Any other and such further relief as the Hon'ble Court deem fit and proper in the interest of justice together with costs."
The facts of this case may be summarised as under :
At the time of filing of this writ-application, the petitioner was working as a Work-charged Pump Attendant in the regular timescale of pay. The petitioner was given the benefit of the 3rd, 4th and 5th Pay Commission. The petitioner, all of a sudden, received a copy of the letter dated 9th July 2012 from the respondent addressed to the Deputy Executive Engineer, Jambusar, for the recovery of the amount of wages paid in excess. The petitioner was taken by surprise as regards the sudden action on the part of the respondent. He was made to understand that there was a wrong fixation of his pay while granting the 4th Pay Commission benefits. These benefits were extended to him years back.
Mr.T.R.Mishra, the learned counsel appearing for the petitioner, submitted that the action of the respondents in effecting recovery is absolutely unreasonable and contrary to the decision of the Supreme Court in the case of State of Punjab and others v. Rafiq Masih (White Washer) and others, (2015)4 SCC 334.
Mr.Mishra submitted that assuming for the moment that there was some mistake in the fixation of pay, the mistake was not on account of any misrepresentation on the part of the petitioner. If that be so, the petitioner should not be penalized.
Page 2 of 15HC-NIC Page 2 of 15 Created On Sun Feb 28 04:18:43 IST 2016 C/SCA/10279/2012 ORDER This application has been vehemently opposed by Mr.Rathod, the learned counsel appearing for the respondent. An affidavit-in-reply has been duly affirmed by the Executive Engineer, inter alia, making the following averments :
"7. At the further outset, I say and submit that, the impugned communication dated 9.7.2012 is an intra departmental communication calling for the details of recovery of amount which were paid in excess to his actual entitlement of the petitioner during June, 1983 to December, 1995 and the proposed installment.
8.1 With reference to contents of paragraph nos.1 and 2 of the memo of petition, it is denied that the petitioner is working as work charged "Pump Operator". I say and submit that, the petitioner was appointed as work charged "Pump Attendant" and even today he is working on "Pump Attendant" not as pump operator. It is denied that the petitioner is getting benefit of pay commission as stated in the said paragraph but the petitioner being work charged employee is getting benefit of revision of pay fixed time to time by the Government for the work charged employee. I say and submit that under revision of Pay Rules the work charged employees are not entitled for benefit of revision of pay.
I say and submit that, no order of recovery was passed in pursuance of communication dated 9.7.12. I say and submit that, the order of recovery of Rs.860/- per month was passed in the year 2008 in pursuance of the rectification order dated 12.3.03. I say and submit that the said order of 2008 was accepted by the petitioner and accordingly the recovery of Rs.82,731/- was ordered to be recovered in 96 installments of Rs.860 each. Thus, the petitioner is mixing up the two issues with a view to take undue advantage by complicating the issue. I further say and submit that, the order of effecting recovery of Rs.82,731/- was dated 19.11.08 for the amount paid in excess for the period January, 1996 to October, 2008. I reiterate the said order was accepted by the petitioner and accordingly the recovery is affected Page 3 of 15 HC-NIC Page 3 of 15 Created On Sun Feb 28 04:18:43 IST 2016 C/SCA/10279/2012 ORDER w.e.f November, 2008 in installment.
So far as the impugned Communication dated 9.7.12 is concerned i.e. in respect of the amount paid in excess for the period June, 1983 to December, 1995. I say and submit that, no actual order of recovery was passed in respect of the said period and therefore no recovery is made in pursuance of the communication dated 09.07.12 and challenge to the said communication is premature.
8.2 With reference to contents of paragraph no.3 of the memo of petition, I say and submit that, the communication dated 09.07.12 is an intra departmental communication calling for the details of recovery and the proposed installment. However, no actual order of effecting recovery was passed and therefore the question of affording opportunity of hearing to the petitioner in respect of Intra Departmental Communication does no arises.
8.3 With reference to contents of paragraph no.4 of the memo of petition, it is stated that till date, no action is initiated in pursuance of intra departmental communication dated 09.07.12 and therefore it is denied that the board has committed any illegality as alleged. I reiterate that till date no order is passed on the basis of intra departmental communication dated 9.7.12 and therefore question of violation of principle of natural justice does not arise. It is denied that the petitioner was not aware of the wrong fixation of his pay scale. The petitioner has also challenged the rectification order dated 12.03.03 by way of RCS No. 118/03 which came to be disposed of and thereafter no steps were initiated by the petitioner. It is submitted that after returning of the suit the order of recovery of Rs.82,731/- for the period of 1.1.1996 to 31.10.2008 was passed vide order dated 19.11.1998, which was accepted by the petitioner without any challenge and the said order was implemented in November, 2008. Thus the petitioner has made false statement that he was not aware about the said fact."Page 4 of 15
HC-NIC Page 4 of 15 Created On Sun Feb 28 04:18:43 IST 2016 C/SCA/10279/2012 ORDER Having heard the learned counsel appearing for the parties and having considered the materials on record, I am of the view that the action on the part of the respondent in effecting the recovery is not in accordance with law.
In State of Punjab (supra), the Supreme Court observed as under :
"6. In view of the conclusions extracted hereinabove, it will be our endeavour, to lay down the parameters of fact situations, wherein 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 did not furnish any factually incorrect information, on the basis whereof the employer committed the mistake of paying the employee more than what 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 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 Page 5 of 15 HC-NIC Page 5 of 15 Created On Sun Feb 28 04:18:43 IST 2016 C/SCA/10279/2012 ORDER 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 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.Page 6 of 15
HC-NIC Page 6 of 15 Created On Sun Feb 28 04:18:43 IST 2016 C/SCA/10279/2012 ORDER
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 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.
12. Reference may first of all be made to the decision in Syed Abdul Qadir v. State of Bihar, (2009) 3 SCC 475, wherein this Court recorded the following observation in paragraph 58:
"58. The relief against recovery is granted by courts not because of any right in the employees, but in equity, exercising judicial discretion to relieve the employees from the hardship that will be caused if recovery is ordered. But, if in a given case, it is proved that the employee had knowledge that the payment received was in excess of what was due or wrongly paid, or in cases where the error is detected or corrected within a short time of wrong Page 7 of 15 HC-NIC Page 7 of 15 Created On Sun Feb 28 04:18:43 IST 2016 C/SCA/10279/2012 ORDER payment, the matter being in the realm of judicial discretion, courts may, on the facts and circumstances of any particular case, order for recovery of the amount paid in excess. See Sahib Ram v. State of Haryana, 1995 Supp. (1) SCC 18, Shyam Babu Verma v. Union of India, (1994) 2 SCC 521, Union of India v. M. Bhaskar, (1996) 4 SCC 416, V. Ganga Ram v. Director, (1997) 6 SCC 139, Col. B.J. Akkara (Retd.) v. Govt. of India, (2006) 11 SCC 709, Purshottam Lal Das v. State of Bihar, (2006) 11 SCC 492, Punjab National Bank v.
Manjeet Singh, (2006) 8 SCC 647 and Bihar SEB v. Bijay Bahadur, (2000) 10 SCC 99."
13. First and foremost, it is pertinent to note, that this Court in its judgment in Syed Abdul Qadir's case (supra) recognized, that the issue of recovery revolved on the action being iniquitous. Dealing with the subject of the action being iniquitous, it was sought to be concluded, that when the excess unauthorised payment is detected within a short period of time, it would be open for the employer to recover the same. Conversely, if the payment had been made for a long duration of time, it would be iniquitous to make any recovery. Interference because an action is iniquitous, must really be perceived as, interference because the action is arbitrary. All arbitrary actions are truly, actions in violation of Article 14 of the Constitution of India. The logic of the action in the instant situation, is iniquitous, or arbitrary, or violative of Article 14 of the Constitution of India, because it would be almost impossible for an employee to bear the financial burden, of a refund of payment received wrongfully for a long span of time. It is apparent, that a government employee is primarily dependent on his wages, and if a deduction is to be made from his/her wages, it should not be a deduction which would make it difficult for the employee to provide for the needs of his family. Besides food, clothing and shelter, an employee has to cater, not only to the education needs of those dependent upon him, but also their medical requirements, and a variety of sundry expenses. Based on the above consideration, we are of the view, that if the mistake of making a wrongful payment is detected within five years, it would be open to the employer to recover the same. However, if the Page 8 of 15 HC-NIC Page 8 of 15 Created On Sun Feb 28 04:18:43 IST 2016 C/SCA/10279/2012 ORDER payment is made for a period in excess of five years, even though it would be open to the employer to correct the mistake, it would be extremely iniquitous and arbitrary to seek a refund of the payments mistakenly made to the employee.
14. In this context, reference may also be made to the decision rendered by this Court in Shyam Babu Verma v. Union of India (1994) 2 SCC 521, wherein this Court observed as under:
"11. Although we have held that the petitioners were entitled only to the pay scale of Rs 330-480 in terms of the recommendations of the Third Pay Commission w.e.f. January 1, 1973 and only after the period of 10 years, they became entitled to the pay scale of Rs 330-560 but as they have received the scale of Rs 330-560 since 1973 due to no fault of theirs and that scale is being reduced in the year 1984 with effect from January 1, 1973, it shall only be just and proper not to recover any excess amount which has already been paid to them. Accordingly, we direct that no steps should be taken to recover or to adjust any excess amount paid to the petitioners due to the fault of the respondents, the petitioners being in no way responsible for the same."
It is apparent, that in Shyam Babu Verma's case (supra), the higher pay- scale commenced to be paid erroneously in 1973. The same was sought to be recovered in 1984, i.e., after a period of 11 years. In the aforesaid circumstances, this Court felt that the recovery after several years of the implementation of the pay-scale would not be just and proper. We therefore hereby hold, recovery of excess payments discovered after five years would be iniquitous and arbitrary, and as such, violative of Article 14 of the Constitution of India.
15. Examining a similar proposition, this Court in Col. B.J. Akkara v. Government of India, (2006) 11 SCC 709, observed as under:
Page 9 of 15HC-NIC Page 9 of 15 Created On Sun Feb 28 04:18:43 IST 2016 C/SCA/10279/2012 ORDER "28. Such relief, restraining back recovery of excess payment, is granted by courts not because of any right in the employees, but in equity, in exercise of judicial discretion to relieve the employees from the hardship that will be caused if recovery is implemented. A government servant, particularly one in the lower rungs of service would spend whatever emoluments he receives for the upkeep of his family. If he receives an excess payment for a long period, he would spend it, genuinely believing that he is entitled to it. As any subsequent action to recover the excess payment will cause undue hardship to him, relief is granted in that behalf. But where the employee had knowledge that the payment received was in excess of what was due or wrongly paid, or where the error is detected or corrected within a short time of wrong payment, courts will not grant relief against recovery. The matter being in the realm of judicial discretion, courts may on the facts and circumstances of any particular case refuse to grant such relief against recovery."
A perusal of the aforesaid observations made by this Court in Col. B.J. Akkara's case (supra) reveals a reiteration of the legal position recorded in the earlier judgments rendered by this Court, inasmuch as, it was again affirmed, that the right to recover would be sustainable so long as the same was not iniquitous or arbitrary. In the observation extracted above, this Court also recorded, that recovery from employees in lower rung of service, would result in extreme hardship to them. The apparent explanation for the aforesaid conclusion is, that employees in lower rung of service would spend their entire earnings in the upkeep and welfare of their family, and if such excess payment is allowed to be recovered from them, it would cause them far more hardship, than the reciprocal gains to the employer. We are therefore satisfied in concluding, that such recovery from employees belonging to the lower rungs (i.e., Class-III and Class-IV - sometimes denoted as Group 'C' and Group 'D') of service, should not be subjected to the ordeal of any recovery, even though Page 10 of 15 HC-NIC Page 10 of 15 Created On Sun Feb 28 04:18:43 IST 2016 C/SCA/10279/2012 ORDER they were beneficiaries of receiving higher emoluments, than were due to them. Such recovery would be iniquitous and arbitrary and therefore would also breach the mandate contained in Article 14 of the Constitution of India.
16. This Court in Syed Abdul Qadir v. State of Bihar (supra) held as follows:
"59. Undoubtedly, the excess amount that has been paid to the appellant teachers was not because of any misrepresentation or fraud on their part and the appellants also had no knowledge that the amount that was being paid to them was more than what they were entitled to. It would not be out of place to mention here that the Finance Department had, in its counter- affidavit, admitted that it was a bona fide mistake on their part. The excess payment 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 appellant teachers submitted that majority of the beneficiaries have either retired or are on the verge of it. Keeping in view the peculiar facts and circumstances of the case at hand and to avoid any hardship to the appellant teachers, we are of the view that no recovery of the amount that has been paid in excess to the appellant teachers should be made."
Premised on the legal proposition considered above, namely, whether on the touchstone of equity and arbitrariness, the extract of the judgment reproduced above, culls out yet another consideration, which would make the process of recovery iniquitous and arbitrary. It is apparent from the conclusions drawn in Syed Abdul Qadir's case (supra), that recovery of excess payments, made from employees who have retired from service, or are close to their retirement, would entail extremely Page 11 of 15 HC-NIC Page 11 of 15 Created On Sun Feb 28 04:18:43 IST 2016 C/SCA/10279/2012 ORDER harsh consequences outweighing the monetary gains by the employer. It cannot be forgotten, that a retired employee or an employee about to retire, is a class apart from those who have sufficient service to their credit, before their retirement. Needless to mention, that at retirement, an employee is past his youth, his needs are far in excess of what they were when he was younger. Despite that, his earnings have substantially dwindled (or would substantially be reduced on his retirement). Keeping the aforesaid circumstances in mind, we are satisfied that recovery would be iniquitous and arbitrary, if it is sought to be made after the date of retirement, or soon before retirement. A period within one year from the date of superannuation, in our considered view, should be accepted as the period during which the recovery should be treated as iniquitous. Therefore, it would be justified to treat an order of recovery, on account of wrongful payment made to an employee, as arbitrary, if the recovery is sought to be made after the employee's retirement, or within one year of the date of his retirement on superannuation.
17. Last of all, reference may be made to the decision in Sahib Ram Verma v. Union of India, (1995) Supp. 1 SCC 18, wherein it was concluded as under:
"4. Mr. Prem Malhotra, learned counsel for the appellant, contended that the previous scale of Rs 220-550 to which the appellant was entitled became Rs 700-1600 since the appellant had been granted that scale of pay in relaxation of the educational qualification. The High Court was, therefore, not right in dismissing the writ petition. We do not find any force in this contention. It is seen that the Government in consultation with the University Grants Commission had revised the pay scale of a Librarian working in the colleges to Rs 700-1600 but they insisted upon the minimum educational qualification of first or second class M.A., M.Sc., M.Com. plus a first or second class B.Lib. Science or a Diploma in Library Science. The relaxation given was only as regards obtaining first or second class in the prescribed educational qualification but not relaxation in the educational Page 12 of 15 HC-NIC Page 12 of 15 Created On Sun Feb 28 04:18:43 IST 2016 C/SCA/10279/2012 ORDER qualification itself.
5. Admittedly the appellant does not possess the required educational qualifications. Under the circumstances the appellant would not be entitled to the relaxation. The Principal erred in granting him the relaxation. Since the date of relaxation the appellant had been paid his salary on the revised scale. However, it is not on account of any misrepresentation made by the appellant that the benefit of the higher pay scale was given to him but by wrong construction made by the Principal for which the appellant cannot be held to be at fault. Under the circumstances the amount paid till date may not be recovered from the appellant. The principle of equal pay for equal work would not apply to the scales prescribed by the University Grants Commission. The appeal is allowed partly without any order as to costs."
It would be pertinent to mention, that Librarians were equated with Lecturers, for the grant of the pay scale of Rs.700-1600. The above pay parity would extend to Librarians, subject to the condition that they possessed the prescribed minimum educational qualification (first or second class M.A., M.Sc., M.Com. plus a first or second class B.Lib. Science or a Diploma in Library Science, the degree of M.Lib. Science being a preferential qualification). For those Librarians appointed prior to 3.12.1972, the educational qualifications were relaxed. In Sahib Ram Verma's case (supra), a mistake was committed by wrongly extending to the appellants the revised pay scale, by relaxing the prescribed educational qualifications, even though the concerned appellants were ineligible for the same. The concerned appellants were held not eligible for the higher scale, by applying the principle of "equal pay for equal work". This Court, in the above circumstances, did not allow the recovery of the excess payment. This was apparently done because this Court felt that the employees were entitled to wages, for the post against which they had discharged their duties. In the above view of the matter, we are of the opinion, that it would be iniquitous and arbitrary for an employer to require an employee to refund the wages of Page 13 of 15 HC-NIC Page 13 of 15 Created On Sun Feb 28 04:18:43 IST 2016 C/SCA/10279/2012 ORDER a higher post, against which he had wrongfully been permitted to work, though he should have rightfully been required to work against an inferior post.
18. It is not possible to postulate all situations of hardship, which would govern employees on the issue of recovery, where payments have mistakenly been made by the employer, in excess of their entitlement. Be that as it may, based on the decisions referred to 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."
Mr.Mishra pointed out that his client has already attained superannuation. An amount of rupees eighty-two thousand and Page 14 of 15 HC-NIC Page 14 of 15 Created On Sun Feb 28 04:18:43 IST 2016 C/SCA/10279/2012 ORDER odd is sought to be recovered, part of which has already been recovered by the respondent and a part is now sought to be recovered from his retiral benefits.
Since the entire action is found to be bad in law, there shall be no further recovery and the amount which has been recovered in the past shall be disbursed in his favour within a period of eight weeks from today without fail.
With the above, this writ-application is disposed of. Direct service is permitted.
In view of the order passed in the main matter, the connected Civil Application is also disposed of.
(J.B.PARDIWALA, J.) MOIN Page 15 of 15 HC-NIC Page 15 of 15 Created On Sun Feb 28 04:18:43 IST 2016