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[Cites 12, Cited by 0]

Gujarat High Court

G.G. Patel vs State Of Gujarat & on 24 March, 2015

Author: Abhilasha Kumari

Bench: Abhilasha Kumari

        C/SCA/8299/2008                                JUDGMENT




          IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

             SPECIAL CIVIL APPLICATION NO. 8299 of 2008



FOR APPROVAL AND SIGNATURE:


HONOURABLE SMT. JUSTICE ABHILASHA KUMARI
===========================================================
1   Whether Reporters of Local Papers may be allowed to see Yes
    the judgment ?

2    To be referred to the Reporter or not ?                      Yes

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 No
     to the interpretation of the Constitution of India or any order
     made thereunder ?

================================================================
                         G.G. PATEL....Petitioner(s)
                                 Versus
                  STATE OF GUJARAT & 1....Respondent(s)
================================================================
Appearance:
MR AS SUPEHIA FOR MR IS SUPEHIA, ADVOCATE for the Petitioner(s) No.
1
MR DM DEVNANI, LEARNED ASSISTANT GOVERNMENT PLEADER for the
Respondent(s) No. 1 - 2
================================================================

         CORAM: HONOURABLE SMT. JUSTICE ABHILASHA
                KUMARI

                            Date : 24/03/2015


                            ORAL JUDGMENT

1. The   challenge   in   this   petition   preferred   under  Page 1 of 28 C/SCA/8299/2008 JUDGMENT Article 226 of the Constitution of India, is to the  order   dated   28.02.2008,   passed   by   respondent   No.2­  Director, Accounts and Treasuries, whereby an amount  of Rs.1,39,428/­ has been recovered from the gratuity  of the petitioner. The petitioner has prayed for the  refund of the said amount with interest at the rate of  10%   from   the   date   of   deduction,   till   the   date   of  judgment.

2. The factual matrix of the case is as below:

2.1 The   petitioner   was   appointed   as   Senior   Clerk,  which   is   a   Group­III   post,   on   24.08.1962.   On  29.04.1969,   he   was   promoted   to   the   post   of   Deputy  Accountant,   a   Group­II   post.   On   07.11.1969,   he   was  further promoted as an Accountant, in a Group­I post. 

From 14.03.1975, the petitioner came to be reverted,  by   way   of   penalty,   for   two   years,   from   Group­I   to  Group­II.   On   his   own   request,   he   was   reverted   to  Group­III for a period of two years, with effect from  17.11.1976.   On   09.03.1977,   the   petitioner   was  reverted,   by   way     of   penalty   to   Group­III   post   for  three years. By way of the order dated 06.11.1979, it  was ordered that the petitioner should not be promoted  Page 2 of 28 C/SCA/8299/2008 JUDGMENT to   Group­II   post   for   five   years.   All   the   above  penalties   came   to   be   over   on   05.11.1984.   The  petitioner, therefore, made a request to reinstate him  in the Group­I Post. However, his request was rejected  and he was given a posting in the Group­II post with  effect   from   10.03.1985.   Aggrieved,   the   petitioner  preferred a petition, being Special Civil Application  No.7111   of   1985   in   this   Court,   inter­alia,   praying  that   he   may   be   placed   in   the   Group­I   post   from  06.11.1984,   that   is,   after   all   the   penalties   were  over. The said petition was permitted to be withdrawn  by an order dated 19.01.1994, in view of two letters  dated   02.12.1993,   which   were   taken   on   record.   After  the withdrawal of the above petition, respondent No.2  passed   an   order   dated   14.10.1994,   stating   that   the  petitioner   is   given   the  deemed   date  of  promotion   in  the Group­I post from 06.11.1984 and he would be paid  the   difference   of   salary   from   the   date   when   he  actually  started   working   on   the   said   post,   that  is,  04.02.1994. The pay of the petitioner in the Group­I  post would be notionally fixed as on 06.11.1984. The  excess amount was ordered to be recovered. Page 3 of 28

C/SCA/8299/2008 JUDGMENT 2.2 The   above   order   dated   14.10.1994   was   challenged  by the petitioner before the Gujarat Civil   Services  Tribunal by filing Appeal No.201 of 1996. The appeal  came   to   be   disposed   of   on   04.09.1988,   for   want   of  jurisdiction.   While   the   above   appeal   was   pending,  respondent   No.2   passed   an   order   dated   26.05.1988,  amending   the   earlier   order   dated   14.10.1994,   to   the  effect that since the petitioner was actually promoted  to the Group­II post by the order dated 28.02.1985 and  to the Group­I post by the order dated 04.02.1994, he  would be entitled to the difference of salary in the  Group­II   from   15.03.1985   and   in   the   Group­I   from  05.04.1994, when he actually resumed his duties.  2.3 After   the   disposal   of   the   appeal   before   the  Tribunal,   the   petitioner   made   representations   to  respondent No.2, for the reconsideration of his case,  and  for the grant of a deemed date of promotion for  the   purpose   of   pay   and   allowances,   instead   of  notional.   By   a   communication   dated   23.10.2001,  respondent   No.2   rejected   the   request   of   the  petitioner, stating that whatever had been done was in  accordance with law. 

Page 4 of 28

C/SCA/8299/2008 JUDGMENT 2.4 Thereafter,   the   petitioner   filed   another  petition, being Special Civil Application No.1594 of  2003,   challenging   various   orders   and   praying   for  directions to pay the salary of the Group­I post from  06.11.1984 and to refund the amount of Rs.1,39,428/­  deducted from the gratuity amount of the petitioner.  The   said  petition  was   disposed   of   by   judgment   dated  26.01.2007. The prayer for arrears of the deemed date  of   promotion   was   rejected   on   the   ground   of   delay.  However,   the   petition   was   partly­allowed   qua   the  recovery   of   the   amount   from   the   gratuity   of   the  petitioner, on the ground that the petitioner was not  heard   before   the   recovery   was   made.   The   order  deducting   the   amount   of   Rs.1,39,428/­   from   the  gratuity of the petitioner was quashed and set aside  and   the   respondents   were   directed   to   pass   a   fresh  order after hearing the petitioner. The Letters Patent  Appeal No.1526 of 2007 filed by the petitioner against  the   aforesaid   judgment   was   dismissed   by   the   order  dated 07.03.2008.

2.5 Pursuant   thereto,   the   petitioner   made   a  Page 5 of 28 C/SCA/8299/2008 JUDGMENT representation dated 27.07.2007 to respondent No.2. He  was granted a personal hearing by the said respondent  on   03.10.2007,   when   he   handed   over   an   additional  representation.   After   hearing   the   petitioner   and  considering   the   representations,   respondent   No.2  passed   the   impugned   order   dated   28.02.2008,  maintaining   the   recovery   of   Rs.1,39,428/­   from   the  gratuity amount of the petitioner. Aggrieved thereby,  the petitioner has approached this Court by way of the  present petition. 

3. It may be made clear that in this petition, the  petitioner has confined himself only to the amount of  recovery of Rs.1,39,428/­ deducted from his gratuity  amount. 

4. Mr.A.S.   Supehia,   learned   advocate   for   Ms.I.S.  Supehia,   learned   advocate   for   the   petitioner   has  submitted that, the reason given by respondent No.2 in  the impugned order for maintaining recovery made from  the petitioner is that, as per Rule 57A of the Bombay  Civil   Services   Rules,   1959   ("the   BCSR   Rules"   for  short),   in   a   case   where   a   benefit   is   given   on   the  basis of false information furnished by the concerned  Page 6 of 28 C/SCA/8299/2008 JUDGMENT Government employee, departmental action can be taken  against him and the resultant amount of over­payment  on   account   of   pay   and   allowances   can   also   be  recovered.

4.1 It is submitted that respondent No.2 has made the  recovery on the alleged misrepresentation made by the  petitioner   which,   according   to   the   said   respondent,  has   resulted   in   their   passing   a   wrong   order   dated  14.10.1994, whereby the pay­fixation of the petitioner  has been done. 

4.2 It is submitted that the order dated 14.10.1994  has been passed by respondent No.2, after taking into  consideration   the   entire   service   record   of   the  petitioner,   including   the   penalties   inflicted   upon  him.   After   giving   thoughtful   consideration   to   the  entire matter, as is clearly stated in the said order,  a decision has been taken to grant the petitioner the  deemed date of promotion with effect from 06.11.1984,  after all the penalties imposed on the petitioner were  over. The pay­fixation of the petitioner has been done  on the basis of the said deemed date. It is a decision  Page 7 of 28 C/SCA/8299/2008 JUDGMENT that   has   been   taken   by  the   concerned   respondent  himself,   which   is   apparent   from   the   said   order.  Therefore, it cannot be said that the petitioner has  made   any   misrepresentation   to   the   said   respondent,  which may have led to the passing of the order dated  14.10.1994.

4.3 That the amount of Rs.1,39,428/­ has been granted  as   pay­fixation   pursuant   to   the   order   dated  14.10.1994. It is this amount that has been recovered  from   the  gratuity  of  the   petitioner  by  the   impugned  order dated 28.02.2008, after the petitioner retired  from service on 31.05.1999. 

4.4 It is contended that the petitioner is a senior  citizen, who is living a retired life since 1999. The  order of recovery would cause him great hardship which  would   outweigh   the   equitable   balance   of   the  respondents right to recover, even if it is assumed,  though   not   admitted,   that   the   pay­fixation   has   been  mistakenly granted to the petitioner.  4.5 It is further submitted that the impugned order  Page 8 of 28 C/SCA/8299/2008 JUDGMENT does   not   contain   any   details   of   the   alleged  misrepresentation purported to have been made by the  petitioner,   which   led   to   the   passing   of   the   order  dated   14.10.1994.   There   is,   therefore,   no   valid   or  justifiable   reason   to   recover   the   amount   from   the  gratuity of the petitioner. 

4.6  In support of the above submissions, reliance is  placed   by   the   learned   advocate   for   the   petitioner,  upon   a   judgment   of   the   Supreme   Court   in  State   of   Punjab   and   others   Vs.   Rafiq   Masih   (White   Washer)   etc. reported in 2015 AIR SCW 501.

5. The petition has been opposed by Mr.D.M. Devnani,  learned   Assistant   Government   Pleader,   by   submitting  that   it   is   apparent   from   the   order   dated   14.10.1994  and the impugned order, that certain representations  were made by the petitioner to respondent No.2. There  is a reference to a representation dated 18.04.1994,  which   is   not   on   the   record   of   the   case.   It   can   be  possible that respondent No.2, relying upon the said  representation, has passed the order dated 14.10.1994,  granting   pay­fixation   to   the   petitioner   which,   upon  Page 9 of 28 C/SCA/8299/2008 JUDGMENT later scrutiny, was found to be incorrect.  5.1 The   learned   Assistant   Government   Pleader   has  relied upon a judgment of the Supreme Court in Chandi   Prasad   Uniyal   and   others   Vs.   State   of   Uttarakhand   and   others  reported   in  (2012)   8   SCC   417,  by  submitting that in a case of wrong pay­fixation where  excess   salary   has   been   paid   to   the   employee,   the  recovery   made   by   the   respondent   authorities   is  justified as it is public money that is involved.  5.2 The   learned   Assistant   Government   Pleader   has  further   referred   to   another   judgment   of   the   Supreme  Court in the case of Union Territory, Chandigarh and   others   Vs.   Gurcharan   Singh   and   another  reported   in  (2014) 13 SCC 598,  wherein it is held that in a case  where higher pay­scale has been disbursed by mistake,  the mistake must be rectified and an extra amount so  paid pursuant to such mistake be recovered.  5.3 On   the   above   grounds,   it   is   prayed   that   the  petition be rejected. 

6. This   Court   has   heard     learned   counsel   for   the  Page 10 of 28 C/SCA/8299/2008 JUDGMENT respective parties, perused the averments made in the  petition,   contents   of   the   impugned   order   and   other  documents   on   record.   This   Court   has   also   accorded  thoughtful   consideration   to   the   submissions   advanced  at   the   Bar   and   the   judgments   cited   by   the   learned  counsel for the respective parties. 

7. A perusal of the impugned order dated 28.02.2008  makes it clear that respondent No.2 has directed the  recovery of Rs.1,39,428/­ from the gratuity amount of  the   petitioner   on   the   ground   that   such   recovery   is  possible  and   permissible,   in   view   of   the   proviso   to  Rule   57A   of   the   BCSR   Rules,   in   a   case   where   false  information and misrepresentation has been made which  has led to the passing of an erroneous order. For the  sake of clarity, it may be fruitful to refer to Rule  57A of the BSCR Rules, which reads as  under:

"57­A.   (i)   Notwithstanding   the   provisions  contained in these rules, the pay of a Government  servant whose promotion or appointment to a post   is found to be or to have been erroneous on the  basis of facts, e.g. incorrect seniority, failure  to apply any relevant rules or orders correctly,   shall be regulated in accordance with any general   or   special   orders   issued   by   the   Government   in  Page 11 of 28 C/SCA/8299/2008 JUDGMENT this behalf.
[(ii) When   any   rule   or   order   regulating   pay  is made with retrospective effect, the pay of a  Government   servant   affected   by   such   order   or  rule,   shall   be   fixed   notionally   as   if   the   rule  order   were   applicable   in   his   case   but   the  Government servant concerned shall not be called  upon   to   refund   the   resultant   amount   of  overpayment on account of pay and allowances:
Provided   that   in   case   where   the   erroneous  promotion or appointment was given on the basis  of  false  information  furnished  by  the   concerned  Government employee; departmental action shall be  taken   against   him   and   the   resultant   amount   of   over   payment   on   account   of   pay   and   allowances  shall also be recovered from him.]"

8. In   the   impugned   order,   the   entire   facts   of   the  case of the petitioner have been enumerated in detail  from the record of respondent No.2. There can be no  dispute regarding that the said details are a matter  of   record,   and   have   not   been   manufactured   by   the  petitioner.   No   other   document   has   been   relied   upon  except for the record.

9. This Court may now compare the enumeration of the  service   details   of   the   petitioner   as   given   in   the  Page 12 of 28 C/SCA/8299/2008 JUDGMENT impugned order, to those contained in the order dated  14.10.1994, which is the pay­fixation order and is now  sought to be discarded on the ground that it has been  passed erroneously. The very same service details of  the petitioner, from the very same record, have been  enumerated in detail in this order as well. There is  no difference between the impugned order and the order  dated 14.10.1994 insofar as the service details of the  petitioner   are   concerned,   which   are   a   matter   of  record. The petitioner has not added or justified any  other details which would give a different colour to  the matter. The only difference between the two orders  is   in   the   calculations.   After   considering   and  verifying   the   entire   record   and,   in   the   words   of  respondent   No.2,   after   giving   thoughtful  consideration,   a   decision   has   been   taken   vide   order  dated 14.10.1994, to grant the petitioner the deemed  date of promotion with effect from 06.11.1984, which  is a day after all the penalties of the petitioner got  over on 05.11.1984. As a result of the pay­fixation,  an   amount   of   Rs.1,39,428/­   has   been   allowed  to   the  petitioner on account of pay­fixation. 

10. As has been stated hereinabove, this amount was  Page 13 of 28 C/SCA/8299/2008 JUDGMENT ordered   to   be   recovered  from   the  gratuity  amount   of  the petitioner by an order dated 26.05.1998, which was  the   subject   matter   of   challenge   in   Special   Civil  Application   No.1594   of   2003.   This   Court,   vide   order  dated   21.06.2007,   passed   in   the   above   petition,   set  aside   the   order   of   recovery   on   the   ground   of     the  violation of the principle of natural justice, as the  petitioner was not granted an opportunity of hearing  before   its   passing.   This   Court   directed   the  respondents  to  hear   the  petitioner   and  pass   a  fresh  order.   The   impugned   order   dated   28.02.2008   in   the  present petition is a result of the hearing granted to  the   petitioner   pursuant   to   the   above   order   of   the  Court. 

11. It may be true that the petitioner made certain  representations   to   respondent   No.2,   pursuant   to   the  order   dated   14.10.1994.   However,   by   that   alone,   it  cannot be presumed that the said order has been passed  upon any misrepresentation made by the petitioner, as  it   is   upto   the   concerned   respondent   to  verify   the  record,   which   is   in   his   possession,   and   to   pass   an  appropriate   order.   On   one   hand,   respondent   No.2  states, in the impugned order, that the recovery from  Page 14 of 28 C/SCA/8299/2008 JUDGMENT the gratuity amount of the petitioner is liable to be  made   due   to   a   misrepresentation   made   by   the  petitioner;   however,   in   the   same   breath,   he   states  that   the   order   dated   14.10.1994   was   passed  erroneously. This Court finds no material on record to  justify   the   allegation   of   the   respondents   that   the  petitioner played fraud or made a misrepresentation,  leading to the passing of the pay­fixation order dated  14.10.1994. The ground taken by the respondents in the  impugned   order,   relying   upon   Rule   57A   of   the   BSCR  Rules is, therefore, unjustified and unsustainable in  law as, apart from a mere allegation, no material in  respect   of   the   alleged   misrepresentation   has   been  produced by them.  

12. Even   assuming   that   the   impugned   order   has   been  passed   for   the   sake   of   rectifying   a   mistake   in  granting a wrong pay­fixation, it remains to be seen  whether such an action of the respondents is justified  in law, or not. 

13. Insofar as this aspect is concerned, it would be  illustrative to refer to the relevant judgments of the  Apex Court relied upon by the respective parties.  Page 15 of 28

C/SCA/8299/2008 JUDGMENT

14. In  Chandi Prasad Uniyal and others Vs. State of   Uttarakhand and others (supra), the Supreme Court has  held thus:

"13. We   are   not   convinced   that   this   Court   in  various  judgments  referred    to  hereinbefore   has  laid down any proposition of law that only if the  State  or its officials establish that there was  misrepresentation  or  fraud  on  the part of the  recipients   of   the   excess   pay,   then   only   the  amount     paid     could   be     recovered.       On     the   other   hand,   most   of   the   cases     referred   to hereinbefore turned on the peculiar facts and   circumstances of  those  cases either because the  recipients   had   retired   or   on   the   verge   of  retirement  or were occupying lower posts in the  administrative hierarchy.
14. We are concerned with the excess payment  of   public  money  which  is often described as "tax   payers   money"   which   belongs   neither   to   the  officers who have effected over­payment nor that  of   the   recipients.     We   fail     to     see   why   the  concept of fraud or  misrepresentation  is  being  brought     in     such   situations.     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   Page 16 of 28 C/SCA/8299/2008 JUDGMENT 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   or  the   payee.     Situations     may     also   arise   where  both the payer and the payee are at fault, then  the     mistake     is   mutual.   Payments     are     being  effected     in     many     situations   without     any   authority of law and payments have been  received  by   the   recipients   also without any authority  of   law.     Any   amount     paid/received     without  authority of law can always be recovered barring   few exceptions of  extreme  hardships but not as  a matter of right, in such situations law implies  an  obligation on the payee to repay  the  money,  otherwise     it     would     amount     to     unjust   enrichment."

15. In   a   later   judgment   in   the   case   of  Union   Territory, Chandigarh and others Vs. Gurcharan Singh   and   another   (supra),  the   Supreme   Court   has   held   as  below:

"13. "Increment"   has   a   definite   concept   in  service law jurisprudence. It is an increase or  addition   on   a   fixed   scale;   it   is   a   regular  increase in salary on such a scale. As noted by  this Court in SBI v. Central Govt. Labour Court,  under   the   labour   and   industrial   laws,   an  Page 17 of 28 C/SCA/8299/2008 JUDGMENT increment   is   when   in   a   timescale   of   pay   an  employee advances from the lower point of scale  to   the   higher   by   periodic   additions.   In   other  words, it is addition in the same scale and not  to a higher scale. An increment is an incidence  of employment and an employee gets an increment  by working the full year and drawing full salary.  During the period of suspension, the contract of   service   remains   suspended.   The   order   of  suspension   by   the   departmental   enquiry   has   the  effect   of   temporarily   suspending   the   relations  between   the   master   and   servant   with   the  consequence   that   the   servant   is   not   bound   to  render service and, therefore, the petitioner as  an employee is not entitled to increments during   this period which is taken as period not spent on  duty."

Paragraph 13

16. In the above two judgments, the Supreme Court has  rightly shown its concern regarding the disbursement  of   excess   money   from   the   public   exchequer   due   to   a  bonafide  mistake,  devoid   of   the   concept   of   fraud   or  misrepresentation.   It   is   stated   that   after   the  employer has paid some amount to the petitioner as a  result   of   a   mistake,   such   mistake   can   aways   be  rectified so as not to burden the public exchequer. Page 18 of 28

C/SCA/8299/2008 JUDGMENT

17. However,   the   law   in   this   regard   was   evolved  further in the latest judgment of the Supreme Court in  State   of   Punjab   and   others   Vs.   Rafiq   Masih   (White   Washer) etc. (supra), the Supreme Court has laid down  certain principles of law regarding recovery of excess  dues   paid   mistakenly   to   an   employee   and   has  categorised   certain   class   of   employees,   who   would  suffer   great   hardship   due   to   the  recovery.   The   Apex  Court has held, after examining a catena of judgments,  that the orders seeking recovery of monetary benefits  wrongly extended to employees, can be interfered with  where   the   recovery   would   result   in   a   hardship   by  another which would far outweigh the equitable balance  of the employer's right to recover. The exposition of  law by the Supreme Court in this regard is as below:

"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  Page 19 of 28 C/SCA/8299/2008 JUDGMENT 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 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  Page 20 of 28 C/SCA/8299/2008 JUDGMENT 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   Page 21 of 28 C/SCA/8299/2008 JUDGMENT life,  and  by  promoting  economic interests of  the weaker sections.

10.   In view of the afore­stated 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. ..........Premised   on   the   legal   proposition  considered   above,   namely,   whether     on     the  Page 22 of 28 C/SCA/8299/2008 JUDGMENT 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 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.  Page 23 of 28

C/SCA/8299/2008 JUDGMENT 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.... 

12. 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   Class­III  and  Class­IV  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.
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        C/SCA/8299/2008                                JUDGMENT



     (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."

(emphasis supplied)

18. In the above judgment, the Supreme Court has gone  a   step   further   and   has   stated   that   even   though   the  excess amount may have been paid to the employee by  mistake,   the   recovery   of   that   amount   can   be   struck  down if it entails undue hardship to an employee who  falls under the classifications made in Paragraph­12  of the judgment as reproduced hereinabove.

19. Examining the case of the petitioner in light of  the above judgment of the Apex Court, it is apparent  that the petitioner, who has retired from service on  31.05.1999,   would   be   well   into   his   seventies   as   of  Page 25 of 28 C/SCA/8299/2008 JUDGMENT today.   The     petitioner   is     surviving   on   a   pension  which   would   barely   be   sufficient   to   make   two   ends  meet. Being a senior citizen, the petitioner may have  to make provisions for medical treatment, as and when  required. Besides this, it is a fact of life that the  cost   of   living   is   rising   day   by   day.   The   impugned  recovery from the gratuity of the petitioner would, in  the   considered   view   of   this   Court,   inflict   a   much  greater hardship and heartburning upon the petitioner,  apart   from   it   being   unjustified   and   arbitrary   in  nature. The hardship faced by the petitioner would far  outweigh the right of the State Government to recover  the   amount,   even   if   it   has   been   assumed   that   it   is  paid mistakenly.

20. As already stated hereinabove, the impugned order  states   that   a   misrepresentation   was   made   by   the  petitioner   which   led   to   a   wrong   pay­fixation   order.  However, there is not a shred of material on record to  indicate the nature of the alleged misrepresentation  or that the order of pay­fixation dated 14.10.1994 was  a result of such misrepresentation. On the contrary,  the   said   order   has   clearly   been   passed   after  considering   each   and   every   aspect   of   the   service  Page 26 of 28 C/SCA/8299/2008 JUDGMENT details   of   the   petitioner   from   the   record   of   the  respondents.   There   is   no   element   of   subjectivity   to  it. 

21. Even   if   it   is   assumed   that   the   said   order   has  been   passed   by   mistake,   the   respondents   are   not  entitled to recover the amount from the petitioner as  he   falls   under   categories   (i),   (ii)   and   (iii)  enumerated   in   Paragraph­12   of   the   judgment   of   the  Supreme Court in State of Punjab and others Vs. Rafiq   Masih (supra). In view of the judgment of the Supreme  Court,   no   recovery   could   have  been   made   against  the  petitioner at all. The impugned order dated 28.02.2008  is,   therefore,   arbitrary,   illegal   and   unsustainable­ in­law and deserves to be quashed and set aside. 

22. Viewed   from   every   angle,   the   case   of   the  petitioner must succeed. 

23. For   the   aforestated   reasons,   the   impugned   order  dated 28.02.2008, passed by respondent No.2, is hereby  quashed and set aside. Respondent No.2 is directed to  refund the amount of Rs.1,39,428/­ recovered from the  gratuity of the petitioner with interest at the rate  of 8% per annum from the date of such recovery, within  Page 27 of 28 C/SCA/8299/2008 JUDGMENT a period of four weeks from the date of the receipt of  a copy of this judgment. 

24. The petition is allowed in the above terms. Rule  is   made   absolute,   accordingly.     There   shall   be   no  orders as to costs.

(SMT. ABHILASHA KUMARI, J.) piyush Page 28 of 28