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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 10692 OF 2015
Issak Abbas Hawaldar,
Age : 60 years, Occ : Retired Employee
R/o : Hawaldar Colony,
A/P. Islampur, Tal : Walwa,
Dist : Sangli ......Petitioner
:VERSUS:
1. The Block Education Officer,
Panchayat Samiti, Hatkanangale
2. The Education Officer (Primary)
Zilla Parishad, Kolhapur
3. The Senior Accounts Officer,
Zilla Parishad, Kolhapur
4. The Chief Executive Officer,
Zilla Parishad, Kolhapur
5. State of Maharashtra
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Through Government Pleader (AS)
6. The Panchayat Samiti, Hatkanangale
through B.D.O., Tal : Hatkanangale,
Dist : Kolhapur
7. The Accounts and Finance Officer,
Zilla Parishad, Kolhapur ...Respondents
*****
Mr. Akhil Kupade i/by. Ms. Geetanjali R. Golatkar, Advocate
for the petitioner.
Mr. R.D. Rane, Advocate for respondents no.1 to 4, 6 and 7,
Zilla Parishad at Kolhapur.
Mr. C.P. Yadav, AGP for respondent no.5.
CORAM :- B.R. GAVAI, &
SANDEEP K. SHINDE, JJ.
DATE :- 7TH NOVEMBER, 2017.
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JUDGMENT (PER :- SANDEEP K. SHINDE, J) :
1. Rule. Rule made returnable forthwith.
2. Heard Learned Counsel for the parties.
3. The question that arises for consideration in this writ is, "Whether overpayment of amount due to wrong fixation of petitioner-teacher's pay-scale, based on Sixth Pay report could be recovered after retirement from his terminal benefits ?
4. The petitioner was appointed as Primary Teacher in Panchayat Samiti, Arale, Taluka-Panhala, District- Kolhapur in November, 1976 as Class-IV employee of respondent no.1. On 30th June, 2014 when he retired, he was Extension Education Officer, Class-III, employee of the Panchayat Samiti, Hatkangale. He had put-in, almost 38 years unblemished service. His terminal benefits were calculated and ordered to be paid on 12 th September, 2014. In ::: Uploaded on - 17/11/2017 ::: Downloaded on - 18/11/2017 00:21:22 ::: Rane * 4/20 * WP-10692-2015 7November, 2017 the very order, the Education Officer, Primary Zilla Parishad, Kolhapur directed to recover Rs.3,97,092/- towards overpayment of amount, from his gratuity and pension. The petitioner enquired with the respondents about the alleged recovery, whereupon, he was informed on account of error in fixation of his pay in July, 2010 resulted into over payment. This fact could be verified from letter dated 15 th July, 2014 addressed by the Education Officer to the Block Education Officer, Panchayat Samiti, Hatkangale which is at Exhibit-F.
5. It also appears from another letter dated 18 th June, 2014 addressed to the Block Education Officer by the Education Officer, Zilla Parishad that inadvertently two annual increments were awarded to the petitioner in July, 2008 and in the result his pay was fixed in July, 2010 on the higher side.
6. It is not in dispute that the recovery proceedings of excess pay was started by the respondent for the first time on ::: Uploaded on - 17/11/2017 ::: Downloaded on - 18/11/2017 00:21:22 ::: Rane * 5/20 * WP-10692-2015 7November, 2017 23rd June, 2014 as is evident from Exhibit-E.
7. It is the petitioner's case that, to avoid the differences with the respondents and to secure regular payment of pension, he voluntarily paid Rs.3,97,092/- in the treasury on 31st December, 2014. It is his case that, on 11th May, 2015 he made a representation to the Chief Executive Officer, Zilla Parishad, Kolhapur and requested that the recovery of the huge amount of Rs.3,97,092/- caused constraints and financial difficulties to meet the needs of the family members.
8. It is his case that, his representation was rejected by the Chief Executive Officer in June, 2016 on the ground that since the amount has already been recovered, it cannot be repaid to the petitioner. In these set of facts, the petitioner has approached this Court with a request to direct the respondents to repay Rs.3,97,092/- with interest at the rate of 12% p.a. by quashing and setting aside the order dated 12th ::: Uploaded on - 17/11/2017 ::: Downloaded on - 18/11/2017 00:21:22 ::: Rane * 6/20 * WP-10692-2015 7November, 2017 September, 2014 vide, subject amount was sought to be recovered.
9. Heard Mr. Kupade, Learned Counsel for the petitioner, Mr. Rane, Learned Counsel for the Zilla Parishad and Learned APP for the State.
10. On behalf of the Zilla Parishad, Mr. Magdum, the Deputy Education Officer filed Affidavit-in-reply and contended that since the petitioner himself has deposited the amount which was admittedly overpaid to him, he has no right to lay his hands on such excess payment and in absence of any such rights, the petition may kindly be dismissed.
11. Learned Counsel appearing for the petitioner has taken us through the impugned order and the correspondence between the respondents inter-se, to substantiate that on 23rd June, 2014 for the first time, the respondent initiated recovery seven days before his ::: Uploaded on - 17/11/2017 ::: Downloaded on - 18/11/2017 00:21:22 ::: Rane * 7/20 * WP-10692-2015 7November, 2017 retirement. He further submitted that, the petitioner was appointed as a Class-III employee and retired as Class-IV. He submitted that, petitioner was actually paid the terminal benefits in September, 2014. He would submit that, the recovery of the alleged excess payment was initiated nearly after six years. He has invited our attention to letter dated 10th June, 2014 at Exhibit-D which shows that two increments were inadvertently awarded to the petitioner in July, 2008 which resulted into wrong fixation of pay in July, 2010. He submitted that, though the petitioner had deposited the subject amount voluntarily, he did not waive his rights to reclaim being recovery was not permissible in law. The Learned Counsel has relied on the judgment of the Apex Court in the case of State of Punjab and Others V/s. Rafiq Masih (White Washer) etc. in Civil Appeal No. 11527 of 2014 and submitted that the Apex Court in para- 12 has held that, where payments have mistakenly been paid by the employer in excess of their entitlement, recoveries by the employers would be impermissible in law, ::: Uploaded on - 17/11/2017 ::: Downloaded on - 18/11/2017 00:21:22 ::: Rane * 8/20 * WP-10692-2015 7November, 2017
(i) if recovered from employees belonging to Class- III and Class-IV servants,
(ii) recovery from retired employees or employees who are due to retire within one year of the order of recovery.
12. Learned Counsel would therefore submit, petitioner was Class-IV employee when he had retired. He would submit, recovery of over-payment was ordered after retirement and that too from his terminal benefits, and as such , such a recovery was impermissible in law, as held by the Apex Court. He therefore submitted that, the order dated 12th September, 2014 be quashed and set aside and the respondents be directed to refund a sum of Rs.3,97,092/- with interest at the rate of 12% p.a. from the date of recovery till its realisation.
13. The Learned Counsel further submitted that, the petitioner had not misrepresented his employers in fixation of his pay and further the petitioner was not aware about the ::: Uploaded on - 17/11/2017 ::: Downloaded on - 18/11/2017 00:21:22 ::: Rane * 9/20 * WP-10692-2015 7November, 2017 wrong fixation of the pay. The Learned Counsel, thus relied on judgment of the Apex Court in the case of Syed Abdul Qadir and Others V/s. State of Bihar and Others, reported in (2009) 3 Supreme Court Cases page 475, wherein it was held :
(a)if the excess amount was not paid on account of any misrepresentation or fraud on the part of the employee, and
(b)if such excess payment was made by the employer by employing wrong principle or calculating pay/allowance or on the basis of a particular interpretation of Rule/Order found to be erroneous;
employer cannot recover such excess amount.
14. On the other hand, Mr. Rane, the Learned Counsel for the Zilla Parishad has relied on the judgment of the Supreme Court in the case of Chandi Prasad Uniyal and Others. V/s. State of Uttarakhand and Others, reported in (2012) 8 Supreme Court Cases page 417 ::: Uploaded on - 17/11/2017 ::: Downloaded on - 18/11/2017 00:21:22 ::: Rane * 10/20 * WP-10692-2015 7November, 2017 and submitted that the Supreme Court has not laid down any principle of law, that only, if the State or its officials establish that, there was a misrepresentation or fraud on the part of the recipient of the excess pay, then only the amount paid could be recovered. Mr. Rane, therefore submitted that, the amount paid/received without any authority of law can always be recovered barring few exceptions of extreme hardships but not as a matter of right. Mr. Rane, also submitted that the relief granted by the Supreme Court in the case of Syed Abdul Qadir (supra) was in exercise of jurisdiction under Section 142 of the Constitution of India, whereas in 2012 in the case of Chandi Prasad Uniyal (supra), employers right to recover the excess amount has been accepted and upheld by the Apex Court, under Article 136 of the Constitution. Mr. Rane, thus submitted, since Apex Court has laid down the law in the case of Chandi Prasad Uniyal , respondents herein had every right to recover the overpaid amount, even though the employee had not misrepresented the employer while fixing his pay.
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15. We have perused the pleadings. Indisputedly, the petitioner had retired as a Class-III employee on 30 th June, 2014 after serving the respondents for 38 years. Undisputedly, the petitioner's pay was fixed on 1st July, 2010 incorrectly but inadvertently by the respondents. It appears from the record and in particular, a letter dated 10th June, 2014 at Exhibit-D that the two annual increments were awarded to the petitioner on 1st July, 2008. An explanation was called for by the Education Officer, Zilla Parishad, Kolhapur. Thus, it is to be concluded that, the petitioner's pay scale was wrongly fixed atleast five to six years before the date of retirement. It is not in dispute that, on 12th September, 2014 the respondent ordered to recover the overpayment. The petitioner voluntarily deposited the amount on 31st December, 2014. His representation to the respondents for refund of recovered amount was rejected in April, 2016. Indisputedly, the petitioner was not instrumental, in any way, while fixing his pay incorrectly in 2010 or for awarding two annual increments in 2008. ::: Uploaded on - 17/11/2017 ::: Downloaded on - 18/11/2017 00:21:22 :::
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16. We have also perused the law on the issue as propounded by the Apex Court, qua issue in the petition.
(i) In the case of Shyam Babu Verma and
Others Vs. Union of India and Others,
reported in 1994 2 SCC page 521 , the Bench of three Judge found in the given case, that after ten years, the respondent, employer initiated the recovery for overpayment on account of wrong fixation of salary done in 1973. In the facts of the given case, the Apex Court has held that, it shall only be just and proper not to recover any excess amount which has already been paid to them and further directed no steps should be taken to recover or to adjust any excess amount paid to the petitioners due from the respondents (employers), the petitioners being in no way responsible for the same.
(ii) In the case of Sahib Ram V./s. State of Haryana and Others, reported in 1995 Supp ::: Uploaded on - 17/11/2017 ::: Downloaded on - 18/11/2017 00:21:22 ::: Rane * 13/20 * WP-10692-2015 7November, 2017 (1) Supreme Court Cases page 18, the Apex Court followed the judgment in Shyam Babu Verma's case (supra) having found, the employee concerned was not instrumental in receiving the higher pay scale and as such held that the overpaid amount may not be recovered from the employee.
(iii). In Syed Abdul Quadir's case (supra), a judgment by three Judge Bench, wherein it was held that "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 hardship that will be caused if recovery is ordered.
(iv). That in Chandi Prasad Uniyal's case (supra), the Apex Court has held that the amount paid/received without authority of law can always be recovered barring few exceptions of extreme ::: Uploaded on - 17/11/2017 ::: Downloaded on - 18/11/2017 00:21:22 ::: Rane * 14/20 * WP-10692-2015 7November, 2017 hardship but not as a matter of right and further held that, the Apex Court in the various judgments has not laid down any preposition of law that only if the State or its officials establish that there was misrepresentation or fraud on the part of the recipient of the excess pay, then only the amount paid could be recovered.
17. It appears since, there was apparent difference of opinion expressed, on one hand, in Shyam Babu Verma's and Sahib Ram's case and, on other hand, in Chandi Prasad Uniyal's case, and thus those batch of matters was placed before the Three Judge Bench for authorative pronouncement.
18. The Three Judge Bench returned the reference without answering it for the disposal before the appropriate Benches, having found that the observations made by the Court, not to recover excess amount paid to appellants in ::: Uploaded on - 17/11/2017 ::: Downloaded on - 18/11/2017 00:21:22 ::: Rane * 15/20 * WP-10692-2015 7November, 2017 Shyam Babu Verma's case and Sahib Ram's case were, in exercise of its extra-ordinary powers under Article 142 of the Constitution of India which vests in Supreme Court to pass equitable orders to meet the ends of justice and that in Chandi Prasad Uniyal's case in exercise of jurisdiction under Article 136 of the Constitution of India. On this premise, the Reference Court held that, the law laid down in Chandi Prasad Uniyal's case in no way conflicts with the observations made in the other two cases. The reference was returned vide order reported in the case of State of Punjab and Others Versus. Rafiq Masih (Whitewasher) (2014)8 SCC 883 reported in (2014) 8 Supreme Court Cases page
883.
14. The very issue again came up for consideration before the Apex Court in the case of State of Punjab and Others etc. Versus. Rafiq Masih's (White Washer) etc. delivered in Civil Appeal No. 11527 of 2014 dated 18 th December, 2014. The two Judge Bench of the ::: Uploaded on - 17/11/2017 ::: Downloaded on - 18/11/2017 00:21:22 ::: Rane * 16/20 * WP-10692-2015 7November, 2017 Apex Court, after taking survey of the earlier law on the issue, in para-12 summarized few situations wherein recovery of the overpaid amount was held 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 ::: Uploaded on - 17/11/2017 ::: Downloaded on - 18/11/2017 00:21:22 ::: Rane * 17/20 * WP-10692-2015 7November, 2017 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."
15. That from the judgments of Supreme Court, law on subject issue, stands crystallized as under :-
(i)that the amount paid/received without authority of law can always be recovered barring few exceptions of extreme hardship but not as a matter of right. (emphasis supplied)
(ii)the relief against recovery was granted by Courts in Syed Abdul Quadir's case, Shyam Babu Verma and Sahib Ram's case (supra) not because of any right. (emphasis supplied)
(iii)Recovery is impermissible in law, if :
(i)Recovery from employees belonging to Class-III and Class-IV service (or Group 'C' and Group 'D' service).::: Uploaded on - 17/11/2017 ::: Downloaded on - 18/11/2017 00:21:22 :::
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(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."
16. Thus, after going through the law on the issue and the facts in hand, the case of the petitioner falls in ::: Uploaded on - 17/11/2017 ::: Downloaded on - 18/11/2017 00:21:22 ::: Rane * 19/20 * WP-10692-2015 7November, 2017 situation/category (i), (ii) reproduced hereinabove.
Admittedly, the petitioner at the time of retirement was Class-IV employee. It is not in dispute that the recovery of the overpaid amount was initiated in June, 2014 i.e. about 7 days before the date of his retirement. The actual amount was sought to be recovered after retirement and from terminal benefits. Therefore, the case of the petitioner is squarely covered under Clauses-(i) and (ii) as reproduced hereinabove.
. Besides, even otherwise undisputedly the petitioner was not instrumental in fixing his pay-scale incorrectly on the higher side, as was wrongly fixed on 1st July, 2010. However, the letter dated 10th June, 2014 at Exhibit-D shows two annual increments were paid to the petitioner inadvertently. That as such, his wrong pay fixation was done atleast five to six years before his retirement and for this reason, his case would also fall in Clause-III, as reproduced hereinabove.
17. In the given set of facts, the petition is allowed and ::: Uploaded on - 17/11/2017 ::: Downloaded on - 18/11/2017 00:21:22 ::: Rane * 20/20 * WP-10692-2015 7November, 2017 hence the following order :-
(i) The Petition is allowed. It is held and declared that recovery of the amount of Rs.3,97,092/from the Petitioner was not permissible and as such, bad in law.
(ii) Respondent Nos.1 to 4 are directed to refund the said amount of Rs.3,97,092/- to the petitioner within a period of eight weeks from today along with interest at the rate of 6% p.a.
18. Rule is made absolute in aforesaid terms. Petition is disposed off.
(SANDEEP K. SHINDE, J) (B.R. GAVAI, J) ::: Uploaded on - 17/11/2017 ::: Downloaded on - 18/11/2017 00:21:22 :::