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Gauhati High Court

Dipendra Nath Thakuria & Anr vs Assam State Electricity Board & 3 Ors on 4 August, 2015

Author: Ujjal Bhuyan

Bench: Ujjal Bhuyan

                               WP(C) No.7371/2013
                                  BEFORE
                     HON'BLE MR. JUSTICE UJJAL BHUYAN
04.08.2015
             Heard Mr. H Das, learned counsel for the petitioners and Mr. HK
Sarma, learned Standing Counsel, Assam Power Distribution Company Ltd.
(APDCL) for the respondents.

By filing this petition under Article 226 of the Constitution of India, petitioners seek quashing of orders dated 17.09.2013 & 18.09.2013 seeking recovery of certain amounts from their monthly pay bill and thereafter from their terminal benefits on the ground of excess payment of salary.

At the time of filing of the writ petition, petitioners were under the Pathsala Electrical Division, APDCL. Subsequently, they retired from service on attaining the age of superannuation on 31.03.2014 and 31.12.2014 respectively. At the time of retirement, both the petitioners were serving as Sub-ordinate Engineer (Grade-II) in Pathsala Electrical Sub-Division, APDCL (Lower Assam Zone). By the two impugned orders dated 17.09.2013 and 18.09.2013, it was stated that owing to error in pay fixation of the petitioners, amounts of Rs. 1,72,979.00 were overdrawn by the two petitioners during the period from 10.04.1989 to 31.08.2013. It was further stated that this was detected by the Assistant Manager (Audit) and communicated vide his letter dated 05.09.2013, whereafter, the impugned orders were issued. It was further stated that recovery would be made from the monthly pay bill at the rate of 5,000.00 per month till superannuation of the petitioners i.e., till 31.03.2014 and 31.12.2014 respectively, and thereafter the balance amount would be recovered from the terminal benefits of the two petitioners.

While the respondents in their counter-affidavit have taken the stand that the petitioners along with others were promoted from the post of Sectional Assistant to Engineer Sub-ordinate Grade-II w.e.f. 10.04.1989, the petitioners actually joined on 01.05.1989. There was wrong fixation of pay of the petitioners taking the initial date of promotion as 10.04.1989, which led to excess pay of the petitioners to which they were not entitled. This was detected while examining the service book of the petitioners, whereafter, Finance Department of APDCL informed the authority on 05.09.2013, which is reflected in the impugned order.

Thereafter the pay fixation was rectified and impugned orders were issued to the petitioners to return the excess amount received by them as per conditions mentioned in the impugned orders. It is contended that petitioners' pay was wrongly fixed twice, one on 10.04.1989 and the other on 01.05.1989. Therefore, impugned orders are justified and no interference is called for.

Petitioners in their reply-affidavit have contested the stand taken by the respondents and have asserted that they were not beneficiaries of any excess payment. Whatever payments were made were due to the petitioners. Additionally, it is contended that the alleged anomaly in pay fixation of the petitioners were detected 24 years after the benefits were conferred on the petitioners. Recovery was sought to be made on the eve of their superannuations.

On 24.01.2014, this Court while issuing notice, stayed the recovery subject to petitioners' executing bond to refund the differential amount.

Mr. Das, learned counsel for the petitioners submits that impugned recoveries are totally impermissible in view of the law laid down by the Hon'ble Supreme Court. He submits that petitioners dispute the contention of the respondents that petitioners were paid excess salary i.e., more than what they were entitled to. Even otherwise, the alleged benefits were conferred from the year 1989 till August, 2013 for more than 24 years. There was no misrepresentation or fraud on the part of the petitioners. Moreover, the recovery was sought to be made on the eve of superannuation of the petitioners. Learned counsel for the petitioner has placed reliance on the decision of the Apex Court in State of Punjab & Ors. Vs. Rafique Masih & Ors., (2015) 4 SCC 334 and some other cases.

On the other hand, Mr. Sarma, learned Standing Counsel, APDCL while fairly submitting that respondents do not attribute any misrepresentation or fraud on the part of the petitioners, but nonetheless contend that there was an error in pay fixation of the two petitioners which resulted in excess payment of salary to which they were not entitled. The moment it was detected, immediate steps were taken not only in stopping such excess payment, but also for taking steps for recovery of the excess amount paid from the two petitioners which have been quantified at Rs.1,72,979.00. To ensure that petitioners did not face WPC No. 7371/2013 Page 2 of 6 any hardship, it was decided to deduct Rs.5,000.00 per month from the salary bill of the petitioners till their superannuation and thereafter the balance from their terminal benefits. Mr. Sarma, learned Standing Counsel submits that recovery of such amounts is permissible and cannot be confined only to cases where excess salary has been paid to the employees on account of misrepresentation or fraud committed by the employees. In this connection, he has placed reliance on a decision of the Apex Court in Chandi Prasad Uniyal & Ors. Vs. State of Uttarakhand & Ors., reported in (2012) 8 SCC 417.

Submissions made by learned counsel for the parties have been considered.

At the outset, certain relevant facts may be noticed, which may be necessary for a proper adjudication of the dispute raised in this writ petition. However, considering the nature of the dispute and the possible resolution thereof, it may not be necessary to go into the details of the excess salary allegedly drawn or into the rival contentions about entitlement of the petitioners to what the respondents would contend excess salary.

It is the contention of the respondents that the petitioners on their promotions as Engineer Sub-Ordinate Grade-II in the year 1989 were paid revised salary w.e.f. 10.04.1989 and again w.e.f. 01.05.1989. Petitioners were paid such salary from 1989 till 31.08.2013. Such error in pay fixation was detected only on 05.09.2013 whereafter, the impugned orders were passed on 17.09.2013 and 18.09.2013.

A perusal of the impugned orders would indicate that even as per the respondents, petitioners had overdrawn salary w.e.f. 10.04.1989 to 31.08.2013 owing to error in pay fixation. Respondents however do not attribute any misrepresentation or fraud on the part of the petitioners. In fact, nothing has been placed on record to even remotely suggest such conduct. On the other hand, even as per the respondents, this excess pay was drawn by the petitioners because of error in pay fixation by the department. This error continued undetected for 24 long years till 05.09.2013 whereafter, the impugned orders were issued.

Question for consideration is whether in the facts and circumstances of the case, such recovery from the petitioners, partly from their salary and partly from their terminal benefits would be justified.

As already noticed above, by an interim order, this Court had stayed recovery from the salary of the petitioners. In practical terms, therefore, the same becomes recoverable only from the terminal benefits.

It is true that in Chandi Prasad Uniyal & Ors. (Supra), the Hon'ble Apex Court had clarified that it is not the proposition of law that only if there is misrepresentation or fraud on the part of the recipients of the money in getting the excess pay that the amounts paid could be recovered. Referring to the previous decisions of the Apex Court in the cases of Syed Abdul Quadir & Ors. Vs. State of Bihar & Ors., reported in (2009) 3 SCC 475 and Col. BJ Akkara (Retd.) Vs. Government of India & Ors, reported in (2006) 11 SCC 709, the Hon'ble Supreme Court held that except the few instances pointed out in the aforesaid two cases, excess payment made due to wrong/irregular pay fixation can always be recovered.

However, in a recent decision in Rafique Masih & Ors. (Supra), the Apex Court surveyed the law relating to recovery of excess salary drawn by an employee, including the two cases cited above by the Apex Court in Chandi Prasad Uniyal & Ors. (Supra). After referring to the various case laws on the subject starting from Shyam Babu Verma & Ors. Vs. Union of India, reported in (1994) 2 SCC 521, the Apex Court held that it may not be possible to postulate all possible situations of hardship which would govern employees on the issue of recovery, where payments have mistakenly been made by the employer in excess of the entitlements of the employees. However, based on the various case laws, certain situations where recoveries by the employer would not be permissible in law have been culled out. The Apex Court held as under: -

"18. It is not possible to postulate all situations of hardship which would govern employees on the issue of recovery, where payments have mistakenly been made by the employer, in excess of their entitlement. Be that as it may, based on the decisions referred to hereinabove, we may, as a ready reference, summarise the following few situations, WPC No. 7371/2013 Page 4 of 6 wherein recoveries by the employers, would be impermissible in law:

(i) Recovery from the employees belonging to Class III and Class IV service (or Group C and Group D service).

(ii) Recovery from the retired employees, or the employees who are due to retire within one year, of the order of recovery.

(iii) Recovery from the 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."

In view of the law laid down by the Apex Court in Rafique Masih & Ors. (Supra), it is not necessary for this Court to enter into a determination as to whether salary drawn by the petitioners were in excess of their entitlements or not. This is so because even if we presume that the salary drawn by them was in excess of their entitlements, they would still stand protected from recovery by virtue of situations (ii) and (iii) as mentioned above. Admittedly, on the date of issuance of the impugned orders dated 17.09.2013 and 18.09.2013, petitioner No.1 was due to retire within 1 year whereas, petitioner No.2 was due to retire just above 1 year. The alleged excess payment was made for a period of about 24 years before issuance of the impugned orders. In such circumstances, Court is of the view that recovery sought to be made from the petitioners would not only be impermissible in view of the law laid down by the Apex Court, but would also WPC No. 7371/2013 Page 5 of 6 be harsh and iniquitous to the petitioners since such recovery would have to be made from the terminal benefits.

In view of the above, both the impugned orders dated 17.09.2013 and 18.09.2013 cannot be sustained and are accordingly set aside and quashed.

Writ petition is allowed, but without any order as to costs.

Judge BIPLAB WPC No. 7371/2013 Page 6 of 6