Gujarat High Court
Harshkant Shashikant Joshi vs Vice Chancellor & 6 on 10 August, 2015
Author: J.B.Pardiwala
Bench: J.B.Pardiwala
C/SCA/9626/2014 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 9626 of 2014
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE J.B.PARDIWALA Sd/-
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1 Whether Reporters of Local Papers may be allowed to see the No
judgment ?
2 To be referred to the Reporter or not ? No
3 Whether their Lordships wish to see the fair copy of the No
judgment ?
4 Whether this case involves a substantial question of law as to the No
interpretation of the Constitution of India or any order made
thereunder ?
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HARSHKANT SHASHIKANT JOSHI....Petitioner(s)
Versus
VICE CHANCELLOR & 6....Respondent(s)
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Appearance:
MR ANAND B GOGIA, ADVOCATE for the Petitioner(s) No. 1
MR BB GOGIA, ADVOCATE for the Petitioner(s) No. 1
MR RB GOGIA, ADVOCATE for the Petitioner(s) No. 1
MR.ROHAN YAGNIK, AGP for the Respondent(s) No. 6
MR AR THACKER, ADVOCATE for the Respondent(s) No. 1 - 4
NOTICE SERVED BY DS for the Respondent(s) No. 5 , 7
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CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA
Date : 10/08/2015
ORAL JUDGMENT
1. Rule returnable forthwith. Mr.A.R.Thacker, the learned advocate waives service of notice of rule for and on behalf of the respondent Nos.1 to 4 and Mr.Rohan Yagnik, the learned AGP waives service of notice of rule for and on behalf of the respondent Nos.5 and 6.
2. By this writ application under Article 226 of the Constitution of India, the petitioner, a retired employee of the Saurashtra University, has prayed for the following reliefs:-
Page 1 of 18HC-NIC Page 1 of 18 Created On Fri Aug 14 11:56:55 IST 2015 C/SCA/9626/2014 JUDGMENT "7.(a) Your Lordship may be pleased to admit and allow this Special Civil Application.
(b) Your Lordship may be pleased to set aside and quash the oral judgment dated July 17, 2013 (17-07-2013) passed by the Learned Gujarat University Services Tribunal, Ahmedabad in Application No.40/2011, and Your Lordship may be pleased to quash and set aside the action and orders of the Respondents vide dated May 12, 2014 (12-05-2014), October 30, 2013 (30-10- 2013), and Sept. 17, 2013 (17-09-2013) (Annexure-B, collectively) reducing the pay and grade, re-fixing of pay, and recovery of Rs,12,47,715/-, and may please be directed to release the amounts of Gratuity, Leave encashment, etc. withheld from him, and pay him forthwith along with interest at the rate of 9% from the date of his retirement till the payment is made.
(c) Pending the admission and till the final disposal of the petition, the Respondents may please be restrained from taking any coercive steps or from effecting recovery of Rs.2,92,020/- as per the orders vide Annexure-B, collectively and may further be directed to invest the withheld amounts in any Nationalised Bank and to allow the petitioner to draw the interest on the said amounts periodically, to sustain himself and his family or the amounts withheld may be paid to him on furnishing by him the solvant security of the satisfaction of the Hon'ble Court with any other condition as deemed just and proper.
(d) Any other order or orders as this Hon'ble court may deem just and proper, may please be passed.
(e) The petitioner may please be awarded costs of the litigation."
3. The facts of this case are gross and disturbing.
3.1. The petitioner was appointed as a Laboratory Assistant by the Saurashtra University in the grade of pay scale of Rs.260-430/- in the year 1982. It appears that in the year 1986, he preferred a representation with the University that he should be paid the pay scale of the Laboratory Technician on the basis of the resolution dated 24.10.1981. The representation of the petitioner was accepted by the University and vide order dated 20.12.1986, the pay scale of Laboratory Technician was sanctioned in favour of the petitioner and two other employees.
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3.2. The petitioner retired some time in the year 2010. When time came to sanction his retiral benefits, many issues cropped up as regards the service conditions of the petitioner.
3.3. It is not in dispute that the University was receiving grant from the government and the petitioner was being paid his requisite salary in a particular pay scale till the last from the said grant.
3.4. It appears from the materials on record that the State Government raised a issue as to how the petitioner was appointed and on what basis he was being paid the pay scale of the Laboratory Technician.
3.5. The dispute more or less is now between the University and the State Government but in the process the sufferer is the petitioner. It has been almost more than 5 years that he has retired but has not been paid anythings towards his retiral benefits. It appears that the University refused to sanction any of the retiral benefits as the State Government directed the University to recover the amount paid to the petitioner towards his salary while he was in service of the University.
3.6. It appears that approximately 12 lacs is the amount which the petitioner should have received towards his retiral benefits. The entire amount has been withheld or rather not paid to the petitioner on the say that the same has been adjusted by way of recovery. Not only that, over and above the amount adjusted as aforesaid, a sum of Rs.2,92,020/- is sought to be recovered from the petitioner.
3.7. There is an ad-interim relief dated 10.07.2014 operating restraining the respondents from taking any coercive steps or effecting recovery of Rs.2,92,020/-.
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3.8. In such circumstances referred to above, the petitioner preferred Application No.40 of 2011 before the Gujarat University Services Tribunal at Ahmedabad. The Tribunal vide order dated 17.07.2013 rejected the application. On perusal of the order of the Tribunal it appears that it took the view that in the year 1986 when the petitioner preferred the representation to re-designate his post i.e. the post of the Laboratory Technician and pay him the scale of Rs.380-600/- the petitioner knew that he was not entitled to the same and the same was a misrepresentation on his part.
3.9. At the same time, it is also not in dispute that the representation was accepted by the University and the University extended the pay scale of Rs.380-600/- in favour of the petitioner. I may quote the observations made by the Tribunal as under:-
"In may considered opinion, thereafter University extended pay scale of Rs.380-600 to the applicant wrongly. It appears that by doing this, University has violated Article 14 and 16 of Constitution of India of those citizens who have not applied in furtherance of advertisement of Laboratory Assistant, with pay scale of Rs.260-430. The post of Laboratory Technician was never advertised and applicant was never selected on this post. In that case of the circumstances applicant could not have been extended the pay scale of the post of Laboratory Technician.
If it would have been disclosed in the advertisement that pay scale disclosed for the post advertisement, is likely to be revised as Rs.380-600, instead Rs.260-430, those Laboratory Assistants serving in India at different places in the pay scale of Rs.260-430, would have applied to have a job in the higher pay scale i.e. Rs.380-600. Similarly those who are qualified but serving in the pay scale of Rs.260-430 and not applied in response to advertisement for the post of Laboratory Assistant, having pay scale of Rs.260-430, could have applied. In my considered opinion, if applicant is extended pay scale of Rs.380- 600 of the post of Laboratory Technician, which was not advertised, against post of Laboratory Assistant having pay scale of Rs.260-430, it will amount to violate Article 14 and 16 of other citizens.
Not only that it appears that extension of the pay scale of the Laboratory Technician to the applicant by University amounts to extension of something with was never advertised, which amounts to change in the game. If the action of the University is against the law of advertisement, the same is bad.
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Facts remain that though sufficient opportunity is extended, no rejoinder is filed by the applicant against the reply of opponent No.1 and 2 University and reply of opponent No.6 of Local Fund. Rest of opponents have not filed any reply. Facts remain that though sufficient opportunity was extended, applicant has not filed counter to these two affidavits (Supra) of University.
It is stated by University in its affidavit that while extending pay scale Rs.380-600, undertaking was taken from the applicant. Of course as the copy is not traceable, the same is not produced on the record of the case.
Needless to say that when undertaking is secured it will be always open to have the payment back, in case the same is objected or is found not in accordance with law or rule, as the case may be.
In view of this aspect of the subject matter, it appears to this Tribunal that when things were represented by the applicant and undertaking was given to have the designation of post Laboratory Technician and Pay Scale Rs.380-600, it cannot be said that applicant is not party to secure the benefit not in accordance with law."
4. Mr.Gogia, the learned advocate appearing for the petitioner submitted that his client was appointed by the University after a regular recruitment process as the Laboratory Assistant in the pay scale of Rs.260-430/-. He submitted that after the appointment of the petitioner the respondent-University converted all the posts of the Laboratory Assistant to those of the Laboratory Technician in the scale of Rs.380-560/-. This was done by the University on the basis of the Government Resolution dated 24.10.1981.
5. Mr.Gogia, the learned advocate also submitted that the Head of the Department under whom the petitioner was working had vide his proposal dated 17.07.1986, requested to the respondent No.1 to accord the sanction to convert three posts from the Laboratory Assistant to the Laboratory Technician.
6. Mr.Gogia, the learned advocate also pointed out that the said proposal was placed before the Syndicate of the University and Page 5 of 18 HC-NIC Page 5 of 18 Created On Fri Aug 14 11:56:55 IST 2015 C/SCA/9626/2014 JUDGMENT the Syndicate in its meeting dated 20.12.1986 considered the same and passed the resolution No.21 approving conversion of all the posts of the Laboratory Assistant to the Laboratory Technician.
7. Mr.Gogia, the learned advocate submitted that the petitioner and other employees were also granted the higher grade under the relevant scheme and were also given the benefits of the recommendations of the 5th pay commission from 1.01.1996.
8. Mr.Gogia, the learned advocate also pointed out that the local audit authorities also approved the pay fixation from time to time.
9. Mr.Gogia, the learned advocate submitted that all of a sudden his client was served with a show cause notice dated 19.10.2007 calling upon him to show cause why he should not be reverted in the pay scale of Laboratory Assistant i.e. Rs.260-430/- as revised from time to time.
10. Mr.Gogia, the learned advocate submitted that after attaining the superannuation his client was paid Rs.2,75,528/- towards his CPF+Rs.68-559/- towards the group insurance. The entire gratuity amount including leave encashment etc. was not paid.
11. On the other hand, this writ application has been vehemently opposed by Mr.Rohan Yagnik, the learned AGP appearing for the State-respondent. He submitted that the University had no authority or any power under any Rules or Regulations to convert the post of the Laboratory Assistant to that of Laboratory Technician and the grant being of the pay scale of Laboratory Assistant could not have been adjusted towards the pay of the post of the Laboratory Technician. He submitted that the University ought to have taken the permission of the State Government before doing the same. He Page 6 of 18 HC-NIC Page 6 of 18 Created On Fri Aug 14 11:56:55 IST 2015 C/SCA/9626/2014 JUDGMENT submitted that it is for the University now to make the payment to the petitioner so far as his retiral dues are concerned and the Government should not be asked to pay for the same from the grant which the University receives.
12. Mr.Rohan Yagnik, the learned AGP has placed reliance on the affidavit-in-reply filed on behalf of the respondent No.6. The reply has been tendered today itself and the same is taken on record.
13. Mr.A.R.Thacker, the learned advocate appearing for the University submitted that it is true that the representation preferred by the petitioner and other employees in the year 1986 was accepted by the University and accordingly the benefits were extended in favour of the petitioner. He submitted that the University receives 100% grant towards the salary of the teaching and non-teaching staff. He submitted that the liability of the payment of the salary is of the Government and the retiral benefits are also to be paid by the Government.
14. The University has filed a very interesting affidavit-in- reply. In the reply making the following averments:-
"4. I say that from 9.12.1981 the Government has taken away the power of the University regarding fixation of pay scales of its employees. Therefore the University has no power to sanction the pay scale of its employees after 9.12.1981. Therefore the benefit given to the petitioner in 1986 on the basis of his representation dated 17.7.1986 is without any authority. Therefore the University has power to recover the same on the basis of instructions of Local Fund Audit (Govt. of Gujarat) and the order passed by the Tribunal is just and proper.
5. I say that by way of this petition, the petitioner has challenged the judgment and order dated 17.9.2013 passed by the Gujarat University Services Tribunal in Application No.40/2011 (Annex.A to the petition). I say that looking to the prayer made in the petition, by way of this petition, the petitioner has challenged the order of the Tribunal dated 17.9.2013. The say that when petitioner has challenged the order passed by the Tribunal by way of present petition than it is duty cast upon the Page 7 of 18 HC-NIC Page 7 of 18 Created On Fri Aug 14 11:56:55 IST 2015 C/SCA/9626/2014 JUDGMENT petitioner to satisfy this Hon'ble Court as to how the order passed by the Tribunal dated 17.9.2013 is bad in law. I say that the petitioner has not made any averment in the petition regarding the order passed by the Tribunal. I say that the petitioner has not made any averment in the petition regarding the order passed by the Tribunal. I say that looking the averment made in the petition regarding order of the Tribunal no comment has been made by the petitioner in the petition, Therefore it can be said that the petitioner has admitted the observations, findings recorded by the Tribunal and legality of the order passed by the Tribunal. Therefore the petitioner has no right to file this petition.
6. I say that the petitioner was appointed as Laboratory Assistant pursuant to advertisement given by the University for the Post of Laboratory Assistant in Chemistry Department on 1.9.1981. Pursuant to the said advertisement, the petitioner submitted his application on 12.10.1981 for the post of Laboratory Assistant (Chemistry). When the advertisement was given, in the said advertisement it is specifically mentioned regarding the pay scale of the post of Laboratory Assistant and in pursuance to that, the petitioner made application. I say that thereafter interview was held and the Selection Committee recommended the name of the petitioner vide order dated 2.2.1982 and the said recommendation was accepted by the Syndicate of the University on 27.2.1982. Thereafter appointment order was issued to the petitioner on 1.3.1982. In the said appointment order, the pay scale has been mentioned of the post of Laboratory Assistant in Chemistry Department alongwith two others. The said order was issued on 1.3.1982. Pursuant to the said order, petitioner resumed duty on the same day on the post of Laboratory Assistant. Looking to the aforesaid, it is crystal clear that the petitioner was appointed on the post of Laboratory Assistant and not on the post of Laboratory Technician.
7. I say that the University was established in the year 1967 and there were two head quarters of the University at that time- one at Rajkot and another at Bhavnagar. At the relevant time, there were 2 posts of Laboratory Technicians - One in Physics and another in Bio-science. I say that in the year 1976, when the revision of pay scale came into force, in the said revision of pay scales in 1976, in the Schedule at Sr.No.62, by mistake it was mentioned as Laboratory Assistant instead of Laboratory Technician because at the relevant time, there was no post of Laboratory Assistant in the University. To clarify this mistake, the University wrote letter to the Government and Government clarified the same on 24.10.1981 and substituted the word Laboratory Assistant with Laboratory Technician and pay scale has been mentioned in this regard. I say that when the aforesaid clarification had been made, at that time, the petitioner was not borne on the cadre of Laboratory Assistant.
8. I say that in the resolution of the Government dated 24.10.1981 regarding fixing pay scale apply qua person who is Page 8 of 18 HC-NIC Page 8 of 18 Created On Fri Aug 14 11:56:55 IST 2015 C/SCA/9626/2014 JUDGMENT already working in the University. I say for getting benefit of the said resolution dated 24.10.1981 option form required to be submitted within 4 months i.e. on or before 23.2.1982 as indicated in the resolution. I say that when resolution was passed on that day/date the petitioner was not in service of the University on the post of Laboratory Assistant. The petitioner was appointed on the post of Laboratory Assistant on 1.3.1982 i.e. after the above resolution dated 24.10.1981 was passed by the Govt. therefore, petitioner was not entitled get the benefit of the resolution dated 24.10.1981.
9. I say that the petitioner and two other persons made representation to the University that they should be paid the pay scale of Laboratory Technician on the basis of the resolution dated 24.10.1981. On that basis, the Syndicate of the University took decision on 20.12.1986 and accordingly the said pay scale was given to the petitioner and two others on the basis of representation made by them. I say that after the pay scale was sanctioned by the University, the petitioner has also filed undertaking. I say that when the University passed the resolution, at that time the University was not having power to fix the pay scale of its employees. Therefore the University took undertaking from the petitioner and two other that if the Government will not approved the same, then the petitioner will refund the difference amount to the University and on that condition the pay scale of Laboratory Technician was granted to the petitioner and two others. Therefore it cannot be said that the petitioner is entitled to the pay scale of Laboratory Technician. I say and submit that when the University took the decision on the basis of the representation of the petitioner and others on 11.7.1986, at that time the University was not having the power to sanction the said pay scale and it was the duty of the Syndicate of the University to forward it to the State Government and thereafter only the benefit ought to have been given to the petitioner and others after it being sanctioned by the Government. However that has not been done by the University at the relevant time.
10. I say that when this came to the notice of the Local Fund Audit, they have raised objection. At that time recovery proceedings was initiated against the petitioner but due to the request of the petitioner vide letter dated 23.10.2007 it was not implemented and the recovery was stopped on the basis of representation made by the petitioner.
11. I say that the petitioner was very well aware that he was not entitled to the pay scale of Laboratory Technician and he himself has made representation for the said benefit. Therefore now it is not open for the petitioner to raise objection."
15. The affidavit-in-reply filed on behalf of the respondent Nos.1 to 4 has been affirmed by none other than the in-charge Page 9 of 18 HC-NIC Page 9 of 18 Created On Fri Aug 14 11:56:55 IST 2015 C/SCA/9626/2014 JUDGMENT Registrar of the Saurashtra University. I have my doubts whether the deponent had taken the slightest pains to go through the reply before affirming it on oath. I am saying so because the reply has not filed by an individual but has been filed by a public functionary holding a public office. On one hand the University says that after following the legal procedure the representation of the petitioner was accepted way back in the year 1986 and on the other hand the stance of the University is that from 09.12.1981 the Government had withdrawn the power of the University to fix the pay scale of its employee. The Registrar has said that the University had no power to fix the pay scale of its employee after 09.12.1981, and therefore, the benefit, which was given to the petitioner in 1986 on the basis of his representation dated 17.07.1986 was without any authority.
16. If such representation would have been rejected on the very same day and date, then, probably, the petitioner would not have seen these hard days. After a period of almost 28 years the University says that sorry, the benefit which was granted to you was a mistake and for the mistake committed by the University the petitioner will have to pay the price.
17. Let me accept the case of both the respondents i.e. the State-respondent as well as University as it is. Even if I hold that it was a mistake, and the University had no power to sanction the requisite pay scale for the post of Laboratory Technician, the same cannot be rectified after a period of 28 years by withholding the retiral benefits of its employee. In one of the recent pronouncements of the Supreme Court in the Case of State of Punjab and others versus Rafiq Masih (White Washer) and others, (2015) 4 SCC 334, the Court has explained in detail as to in which circumstances the recovery is permissible. I may quote the observations made by the Supreme Court in Paras 8 to 18 as under:
Page 10 of 18HC-NIC Page 10 of 18 Created On Fri Aug 14 11:56:55 IST 2015 C/SCA/9626/2014 JUDGMENT "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.
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.
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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 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."
(emphasis is supplied)
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 Page 12 of 18 HC-NIC Page 12 of 18 Created On Fri Aug 14 11:56:55 IST 2015 C/SCA/9626/2014 JUDGMENT detected within five years, it would be open to the employer to recover the same. However, if the 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." (emphasis is supplied) 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:
"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."
(emphasis is supplied) Page 13 of 18 HC-NIC Page 13 of 18 Created On Fri Aug 14 11:56:55 IST 2015 C/SCA/9626/2014 JUDGMENT 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 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." (emphasis is supplied) 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 harsh consequences outweighing the monetary gains by the employer. It cannot be forgotten, that a retired employee or an employee Page 14 of 18 HC-NIC Page 14 of 18 Created On Fri Aug 14 11:56:55 IST 2015 C/SCA/9626/2014 JUDGMENT 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 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." (emphasis supplied) 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 Page 15 of 18 HC-NIC Page 15 of 18 Created On Fri Aug 14 11:56:55 IST 2015 C/SCA/9626/2014 JUDGMENT 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 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."
18. With a view to salvage the situation a very feeble argument is sought to be made that the petitioner had given an Page 16 of 18 HC-NIC Page 16 of 18 Created On Fri Aug 14 11:56:55 IST 2015 C/SCA/9626/2014 JUDGMENT undertaking in writing. In 1986 when the University acted in a particular manner it was expected of the University to have promptly and expeditiously sought the approval of the State Government. Indisputably, the same was not done and the petitioner continued for all these years in the service on a post. There is something called the principle of "legitimate expectation". If no objection was raised at any point of time, then the petitioner cannot be faulted even if it is believed that the petitioner had given an undertaking in writing.
19. If it is the stance of the State Government that the grant was misused or misutilized, then, it is for the Government to take appropriate steps against the University and recover the amount if it deems fit. However, the petitioner who has retired 5 years ago should not be made to suffer.
20. In the result, this application is allowed. The impugned order passed by the Tribunal dated 17.07.2013 is hereby ordered to be quashed and set aside. The University is directed to immediately calculate the retiral benefits which the petitioner would have received upon his attaining superannuation in the year 2010 and pay the amount with 10% interest till the date of the actual payment within a period of 2 months from the date of the receipt of the writ of the order.
21. As clarified above, it shall be open for the State Government to take appropriate steps in that regard against the University. Rule is made absolute to the aforesaid extent. Direct service is permitted.
22. It is for the University to decide how it would pay the amount. I am saying so because the stance of the State Government is that they would not be making any payment to the University. If that be so, then the University shall pay from its own funds.
Page 17 of 18 HC-NIC Page 17 of 18 Created On Fri Aug 14 11:56:55 IST 2015 C/SCA/9626/2014 JUDGMENT Sd/- (J.B.PARDIWALA, J.) dharmendra Page 18 of 18 HC-NIC Page 18 of 18 Created On Fri Aug 14 11:56:55 IST 2015