Isak Abbas Hawaldar vs The Block Education Officer, ...
2017 Latest Caselaw 8511 Bom

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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

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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

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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

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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

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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,

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(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

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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

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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.

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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

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(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

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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

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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

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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

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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).

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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

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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

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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)