Dr. (Mrs.) Sharda Nigam vs Daulat Ram College And Anr.
2008 Latest Caselaw 1453 Del

                            Unreportable
*            IN THE HIGH COURT OF DELHI AT NEW DELHI

+                         RFA No. 945 of 2003

%                                             Decided on : August 27, 2008

Dr. (Mrs.) Sharda Nigam                                . . . Appellant

                   through :              Mr. O.P. Saxena with
                                          Mr. K.K. Nigam, Advocates

             VERSUS

Daulat Ram College & Anr.                              . . . Respondents

                   through :              Mr. S.K. Luthra, Advocate


CORAM :-
    THE HON‟BLE MR. JUSTICE A.K. SIKRI
    THE HON‟BLE MR. JUSTICE MANMOHAN SINGH

      1.     Whether Reporters of Local newspapers may be allowed
             to see the Judgment?
      2.     To be referred to the Reporter or not?
      3.     Whether the Judgment should be reported in the Digest?


A.K. SIKRI, J.       (ORAL)

1. Daulat Ram College (hereinafter referred to as the „College‟), who is

the respondent herein, was the plaintiff in the suit filed by it against

the appellant for recovery of Rs.3,13,016/- on the ground that while

implementing the recommendations of the 5th Central Pay

Commission, the pay of the appellant was wrongly fixed as a result

whereof she was given excess salary than the salary which should

have been paid on proper fixation. In this manner, it was stated in

the plaint that a sum of Rs.2,24,926/- was over paid and claiming

interest @ 24% p.a. thereupon the suit for recovery of Rs.3,13,016/-

was filed. The learned ADJ has decreed the suit of the College in the

sum of Rs.2,24,926/- along with interest @ 6% p.a. from the date of

service of notice of demand dated 13.11.2000 when the appellant

was asked to refund the said amount. In this appeal, said judgment

and decree of the learned ADJ is impugned.

2. It is not necessary to state the fact of the matter in detail. Suffice is to

note that the appellant was working as the Reader in the Department

of Political Science of the College, from where she had retired on

31.7.1995. Without any break and with effect from 1.8.1995, she

was re-employed for a period of five years as per the Rules and

Regulations contained in Statutes and Ordinances of the University of

Delhi. The 5th Central Pay Commission, which was constituted by

the Central Government to undertake the exercise of revision of pay

of the Central Government employees, submitted its report which

was accepted by the Government with certain modifications with

effect from 1.1.1996. University Grants Commission also decided to

extend the benefit of these revisions as suggested by the 5th Pay

Commission to the teachers of the Central Universities. It was in this

backdrop that teachers of Delhi University also were given pay

revision with effect from 1.1.1996 and in this manner pay of the

appellant also was revised. Pay of the appellant was fixed at

Rs.14,940/- in the pay scale of Rs.12000-18300 and her salary and

allowances were disbursed accordingly for a certain period.

Subsequently it was found that her pay was wrongly fixed and basic

pay was to be revised at Rs.13,260/-. On this basis, it was claimed

that she was over paid Rs.2,24,926/-, details whereof were given in

the plaint. In these circumstances, vide communication dated

13.11.2000, she was asked to refund the aforesaid amount. As the

appellant did not oblige, the College filed the aforesaid suit, which

has been decreed by the trial court.

3. We proceed on the basis that the basic pay of the appellant initially

was wrongly fixed as Rs.14,960/- whereas it should have been

Rs.13,260/- and that she was over paid a sum of Rs.2,24,926/-. The

only question is that if the College of its own committed the error in

fixing the pay, is it permissible for the College to seek refund of the

amount already paid. The appellant had contended in this behalf

that the Supreme Court had laid down the principle of law in a

number of cases to the effect that in these circumstances payment

already made cannot be recovered though wrong can be rectified

and the correct salary, at reduced rate, can be given for future

period. We find that all these judgments are discussed by the learned

trial court in the impugned judgment. However, the learned trial

court distinguished those judgments and did not follow the dictum

thereof on the premise that the directions contained in those

judgments were given by the Supreme Court in its extraordinary

jurisdiction under Article 142 of the Constitution of India, which

power did not lie with the civil court. It is here the learned ADJ

committed error which resulted in passing of the decree against the

appellant.

4. No doubt, the Supreme Court is vested with wide powers under

Article 142 of the Constitution and it can give directions to subserve

the justice in a particular case. In exercise of the powers under this

Article, the Supreme Court may pass such decree or make such order

as is necessary for doing complete justice in any „cause‟ or „matter‟.

Such a power is normally used sparingly, but is generally exercised by

the Supreme Court to do substantial justice. This plenary power of

the Supreme Court cannot be curtailed by any statutory provision.

The technicalities cannot stand in the way of rendering complete

justice to the parties. However, at the same time, such a power

which is available to the Supreme Court under Article 142 of the

Constitution cannot be exercised by other courts. The moot question

is as to whether the cases in which directions were given not to

recover the excess salary paid by the mistake of the employer were

the directions under Article or it was a principle of law laid down

which would become law under Article 141 of the Constitution to be

followed by all the High Courts and Subordinate Courts. For this

purpose, it would be necessary to scan through these judgments.

5. First case to which we shall refer is the judgment of the Supreme

Court in Shyam Babu Verma & Ors. v. Union of India & Ors., (1994)

2 SCC. That was also a case where the Court found that excess

payment was made to Pharmacists Grade B on wrong application of

principle of equal pay for equal work and the Court held that the

petitioners would not be entitled to the pay scale of Rs. 330-480 in

terms of the recommendations of the 3rd Central Pay Commission

with effect from 1.1.1973. It further held that they would become

entitled to the pay scale of Rs.330-560 only after a period of 10

years. After clarifying this issue, the Court addressed the question of

recovery of excess payment made to these petitioners and held that

since the petitioners had received the pay in the pay scale of Rs.330-

560 since 1973 due to no fault of theirs and that scale was being

reduced in the year 1984 with effect from 1.1.1973, it would not be

just and proper to recover any excess amount which was already

paid to them.

In the first blush this may appear to be a direction on the facts

of this case though at the same time reason for non-recovery was

also specifically assigned, namely, the payments were made to the

petitioners in the said case in the higher pay scale "due to no fault of

theirs". However, even if there was any scope of doubt as to

whether this was a direction under Article 142 of the Constitution or

whether it was a principle of law laid down to be followed by other

courts, the dust stands settled by the Supreme Court in its subsequent

judgments. Consistently, the aforesaid principle is followed by the

Apex Court as well as various High Courts, including this Court,

namely, if the excess payment towards salary or allowances is given

to an employee on wrong fixation, but not because of any

error/falsity which could be attributed to the concerned employee,

recovery of excess payment is not to be made though mistake can be

corrected and salary can be re-fixed, which would have future

application only.

6. It is not necessary to discuss all these cases. Our purpose would be

served by referring to the judgment of the Apex Court in the case of

Col. (Retd.) B.J. Akkara v. Govt. of India & Ors., 2006 AIR SCW

5252 as various earlier judgments are taken note of in this case. The

question which was formulated, under somewhat similar

circumstances, by the Supreme Court ran as follows : "The last

question to be considered is whether relief should be granted against

the recovery of the excess payments made on account of wrong

interpretation/understanding of the circular dated 7.6.1999?". After

formulating this question, the Court answered the same in the

following manner :-

"This Court has consistently granted relief against recovery of excess wrong payment of emoluments/allowances from an employee, if the following conditions are fulfilled [Vide Sahib Ram vs. State of Haryana (1995) Supp 1 SCC 18, Shyam Babu Verma vs. Union of India (1994) 2 SCC 521, Union of India vs. M. Bhaskar (1996) 4 SCC 416 and V. Gangaram v. Regional Joint Director, AIR 1997 SC 2776:

a) The excess payment was not made on account of any misrepresentation or fraud on the part of the employee,

b) Such excess payment was made by the employer by applying a wrong principle for calculating the pay/ allowance or on the basis of a particular interpretation of rule/order, which is subsequently found to be erroneous.

Such relief, restraining recovery back 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, form 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.

26. On the same principle, pensioners can also seek a direction that wrong payments should not be recovered, as pensioners are in a more disadvantageous position when compared to in-service employees. Any attempt to recover excess wrong payment would cause undue hardship to them. The petitioners are not guilty of any misrepresentation or fraud in regard to the excess payment. NPA was added to minimum pay, for purposes of stepping up, due to a wrong understanding by the implementing departments. We are therefore of the view that Respondents shall not recover any excess payments made towards pension in pursuance of circular dated 7.6.1999 till the issue of the clarificatory circular dated 11.9.2001. Insofar as any excess payment made after the circular dated 11.9.2001, obviously the Union of India will be entitled to recover the excess as the validity of the said circular has been upheld and as pensioners have been put on notice in regard to the wrong calculations earlier made."

7. It is manifest that the Court restated the principle following Shyam

Babu Verma (supra) and other judgments viz. if the two conditions,

as reproduced above, are satisfied, the recovery of the excess

payment cannot be made by the employer. The two conditions are

that the excess payment was not made on account of any

misrepresentation or fraud on the part of the employee and that such

excess payment was made by the employer by applying the wrong

principle for calculating the pay/allowance or on the basis of a

particular interpretation of rule/order which was found to be

erroneous. The Court further clarified that this relief was not because

of any right in favour of the employees but in equity. Needless to

mention, this principle in equity laid down by the Supreme Court has

to be applied across the board in all the cases of public employment.

It is not in dispute that the respondent College fits into the

description of „another authority‟ within the meaning of Article 12 of

the Constitution. It is affiliated to the University of Delhi which is a

statutory body. Therefore, the College is supposed to act as a model

employer. Had it take an action for recovery of the amount from

the future salary of the appellant, the appellant could have

approached this Court under Article 226 of the Constitution by filing

a writ petition. In such a writ petition, the Court could have set

aside such a move on the part of the College. Simply because the

College chose to file a civil suit for recovery of the excess amount

paid and it is tried by the civil court, the legal position would not

change. The learned ADJ, therefore, was wrong in holding that the

principle laid down in Shyam Babu Verma (supra) would not be

applied in a civil suit. Both the aforesaid principles squarely apply in

the present case as well and there is not even a dispute about the

same. We are, therefore of the opinion that the College was not

entitled to recover the excess payment which had already been made

and, therefore, suit for recovery of the amount was clearly not

maintainable.

8. The upshot of the aforesaid discussion would be to allow this appeal

and set aside the impugned judgment and decree of the trial court. It

is ordered accordingly.

9. On 19.7.2004, interim order was passed by this Court directing the

appellant to furnish a bank guarantee in the sum of Rs. 2,00,000/-.

The appellant has furnished the bank guarantee, which shall stand

discharged.

No costs.

(A.K. SIKRI) JUDGE

(MANMOHAN SINGH) JUDGE

August 27, 2008 nsk