* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Reserved on: 07th January, 2026
Pronounced on: 12th March, 2026
RFA 1158/2025 & CM APPL. 80384/2025
SH. P.K. CHAWLA (Aged about 79 years)
S/o Sh. B.L. Chawla,
R/o B-119, Shivalik, New Delhi
Presently at: R/o J.P. Aman, Flat No. 1803,
Sector-141, Tower No. 12, Noida, U.P. .....Appellant
Through: Mr. M.D. Jangra, Advocate.
versus
1. UNION OF INDIA
(substituted as P/f vide Order dated 17.04.2018
in place of Organizing Committee
Commonwealth Games 2010, Delhi)
Through the Secretaries,
Department of Sports,
Ministry of Youth Affairs & Sports,
Shastri Bhawan, New Delhi.
2. GP. CAPT. KUK REDDY
(Impleaded as D/f vide Order dated 07.04.2014)
Flat No. C 22, S.S. Apartment,
Sector-9, Dwarka, New Delhi. .....Respondents
Through: Mr. Udit Dedhiya, SPC with
Mr.Shivam Sharma, GP, Ms. Apurva
Sachdev and Mr. Preyansh Gupta,
Advocates for UOI.
CORAM:
HON'BLE MS. JUSTICE NEENA BANSAL KRISHNA
RFA1158/2025 Page 1 of 23
Signature Not Verified
Signed By:VIKAS
ARORA
Signing Date:13.03.2026
13:12:29
J U D G M E N T
NEENA BANSAL KRISHNA, J.
1. The Appellant has filed an application under Section 5 of the
Limitation Act r/w Section 151 Code of Civil Procedure, 1908 (hereinafter
referred to as „CPC‟) seeking Condonation of Delay of 28 days in filing the
Appeal against the Judgment dated 30.07.2025.
2. It is stated that the Appellant a senior citizen applied for certified copy
of the entire Trial court record and the impugned Judgment, on 22.09.2025
which were supplied on 18.10.2025. Thereafter, he approached the Counsel
on 25.10.2025 and the Appeal was prepared after examining the voluminous
record and filed in the second week of November, 2025. It is submitted that
the time consumed in obtaining certified copied deserves exclusion and the
delay, if any, is neither intentional nor deliberate, but occurred due to
circumstances beyond the Appellant's control.
3. For the reasons stated in the Application, the delay of 28 days in filing
the Appeal is condoned. Application is accordingly, disposed of.
RFA 1158/2025:
4. The instant Appeal is filed by the Appellant herein under Section 96
of the CPC, r/w Order XLI Rule 1 of the CPC, against the impugned
Judgement and Decree dated 30.07.2025, whereby the Ld. District Judge,
New Delhi has decreed the Civil Suit for the recovery of Rs. 4,16,500/-
along with pendente-lite and future interest @ 3% p.a., against Defendant
no. 1/Appellant.
Factual background:
5. The Plaintiff/Respondent filed Suit for recovery of Rs. 4,16,500/-
along with pendent-lite interest @18%, as arrears for Transport Allowance
in the Commonwealth Games 2010. This is a recovery dispute arising out of
payment of Organising Committee. Originally the Suit was filed by the
Organising Committee, Commonwealth Games 2010, Delhi and later, after
the Committee ceased to function, the Union of India was substituted as the
Plaintiff.
6. The facts in brief, as stated in the Plaint, are that Sh. P.K. Chawla /
Defendant No.1 was appointed Deputy Director (Accounts) on 02.05.2007
and was subsequently promoted from time to time and was finally promoted
as Deputy Director General (Internal Audits), vide Order dated 31.08.2010
with retrospective effect from 01.04.2009.
7. After this promotion, he submitted a Note dated 09.09.2010 claiming
Transport Allowance retrospectively, from 01.04.2009 @Rs. 26,000/- per
month. The file was processed by Group Capt. K.U.K. Reddy, who
approved and recommended payment, pursuant to which a lump sum
amount of Rs. 4,16,500/- was paid to Defendant No.1, towards Transport
Allowance. This payment came to the notice of Special Director General
(Finance & Accounts) Mr. G.C. Chaturvedi and he proposed recovery of
said amount, from Defendant no.1.
8. It is further stated that after completion of Commonwealth Games, the
High-Level Committee chaired by Mr. V.K. Shungalu, was set up which in
its 5th Report, made adverse observations on reimbursement of Transport
Allowance made to Defendant no.1. Thereafter, vide Letters dated
29.03.2011 and 13.04.2011, Defendant no.1 was requested to refund the
amount of Rs. 4,16,500/-.
9. Defendant no.1, instead of refunding the amount, made a
representation dated 22.04.2011 drawing analogy with other officials of the
UOI, who were entitled to Transport Allowance as per their respective terms
of Appointment, which was duly replied by the CEO, vide Letter dated
09.05.2011. Thereafter, a Show Cause Notice dated 25.05.2011 was issued
to Defendant no.1 to refund the said amount. However, no affirmative Reply
was given by him. Thereafter, a Legal Notice dated 13.06.2011, was served
upon Defendant no.1. Legal Notice was also issued to Group Capt. K.U.K.
Reddy, ADG (Finance & Accounts) / (Defendant No.2), the officer who
processed and approved the payment, which was duly replied by him on
09.03.2012.
10. The plaintiff also requested the Indian Air Force (parent Department
of Defendant no.2) to recover the amount from him, but the Air Force
expressed its inability to recover the amount from Defendant no.2 and
suggested recovery from the beneficiary, i.e., Defendant no.1.
11. The Plaintiff therefore, alleging that the payment was an unauthorized
excess payment, filed the Suit seeking recovery of Rs. 4,16,500 along with
pendente lite interest and future interest @3% p.a.
12. The Appellant/Defendant No.1 in his Written Statement took the
Preliminary Objections that the Suit was not filed by duly authorized person.
Shri Ram Mohan, Additional Director General (Legal), had not been
authorized representative of the Plaintiff. Moreover, he is not a person of
clean antecedents and is facing a criminal trial, under the Prevention of
Corruption Act.
13. It was stated that the Suit was allegedly based on Fifth Report of High
Power Committee, to protect the alleged corrupt Officers and to distract the
Committee appointed by the Government, to check the irregularities
committed during Commonwealth Games, 2010. The Plaintiffs have not
come with clean hands, but the Suit has been filed maliciously to harass and
malign the reputation of the respected citizens of India and is an abuse of
process of law. The Suit did not disclose any cause of action and was liable
to be dismissed.
14. On merits, the Defendant/Appellant explained that the amount as
Transport Allowance, was disbursed by the Plaintiff in parity with other
staff, in accordance with Financial and Administrative Guidelines of the
Organizing Committee, Commonwealth Games, 2010, Delhi, as applicable
to disbursement of expenses including conveyance/transport allowance.
15. The Defendant explained that as per the Promotion Order dated 31 st
August 2010, he was entitled to Transport Expenses as per Service
conditions. He had written a Note dated 09.09.2010 for reimbursement of
Transport Charges @ Rs.26,000/- per month w.e.f. 01.04.2009, to the
Competent Authority i.e. Chairman and not to A.D.G. (F&A), as claimed by
the Plaintiff. It was denied that the Transport Allowance was wrongly
approved by Group Captain K.U.K. Reddy, the then Additional Director
General (Finance and Accounts).
16. The Defendant/Appellant further submitted that Shri N.P Singh Jt.
Director (General Admin & Work Force) approved the payment, in
accordance with the rules and sent the file for approval to A.D.G. (F&A), for
release of payment.
17. The Appellant further asserted that the Transport allowances for the
month of September, October and November 2010 @ Rs.30,000/- approx.
were also awarded to the Appellant. Had he not been entitled for
reimbursement, the Transport expenses for the subsequent months, would
not have been allowed. The observations of Sh. G.C. Chaturvedi, are
erroneous and not based on facts and Rules governing the disbursement of
Transport Allowance and are not binding on the Appellant.
18. It was further submitted that the Suit was instituted to protect corrupt
officers who were facing charges under Prevention of Corruption Act. The
Plaintiff claiming reimbursement of the conveyance allowance by the
Appellant Shri P.K. Chawla with retrospective effect, compounded the
aberration. Both FA (Office Administration) and Finance & Accounts, did
not examine the proposal properly. The amount was disbursed to the
Respondent No. 1 / Defendant as per his entitlement. Moreover, the
processing of any Bill exchanged various hands for approvals and then
received in Treasury / Cashier and as such, no one person is involved nor it
is a case of embezzlement. The Suit has been instituted to dissuade the
Committee set up to check the irregularities committed by the corrupt
officers who are facing charges of corruption.
19. It is further submitted that Mrs. Shovana Narayan (Joint Director
General, (C&C) vide her Note JT.DG(C&C)IA001/2008-2009, dated
12.03.2009 had strongly recommended the promotion of the Appellant /
Defendant, on the basis of his performance and work. The Appellant /
Defendant was in audit and whistle blower in many discrepancies wherein
crores of rupees were saved.
20. In the extract of 5th Report of High-Level Committee headed by V.K.
Shunglu, had observed that apparently the disbursement had been made to
the Defendant "without the approval of GDG(F&A)". It is claimed that the
Report is vague and incomplete. The High-Level Committee Report did not
attribute any misconduct or misuse of power which would debar the
Appellant of the right vested in the entitlement of monthly expenditure.
21. The Appellant / Defendant claimed that the money has been duly
disbursed as per his entitlement in accordance with Rules and Regulation
upon his promotion w.e.f. 01.04.2009. It was claimed that there was no
occasion for the Plaintiff to ask the Defendant, to refund the amount. The
Defendant had issued Letters dated 09.11.2010, 27.12.2010, 18.06.2011 and
21.07.2011 to the Plaintiff, but it chose to remain silent and did not respond
for the reasons best known to it. Hence, it was submitted that the Suit was
without basis and was liable to be dismissed.
22. The Defendant No.2 in its Written Statement, also took a similar
stand of claiming that since the promotion of Defendant No.1 was with
retrospective effect, he was eligible to claim Transport Allowance. Though,
the Defendant No.1 had made a claim for reimbursement @ Rs.26,000/- per
month, he had restricted it to Rs.24,500/-. The SDG (F&A) had put a remark
"what are Rules in this regard?" on 16.09.2010, upon which Defendant
No.2 had discussed the file with him and explained the Rules to him on
19.09.2010, to which he did not raise any objection. No opportunity was
given to Defendant No.2 to explain the payment nor was he called in any
Inquiry. He stated that there was no reimbursement sought from him.
23. The Issues on the pleadings were framed vide Order dated
16.09.2014, as under:
(i) Whether this suit has been duly instituted by
authorized representative? OPP.
(ii) Whether this suit is without cause of action?
OPD.
(iii) Whether the present suit is bad for mis-joinder/
non-joinder of necessary parties? OPD.
(iv) Whether plaintiff is entitled for recovery of suit
amount as prayed? OPD.
(v) Whether plaintiff is entitled for the interest
over the suit amount, if so, at what rate and for
what period? OPP.
(vi) Relief.
24. The Plaintiff in support of its case, examined PW-1 Mr. Abrar
Hussain who proved the documents Ex.PW1/1 to Ex.PW1/6, to explain the
appointment of the Defendant No.1 and the various Orders of promotion and
the Application dated 09.09.2010 Ex.PW1/6 filed by the Defendant No.1, to
seek reimbursement of Transport Allowance.
25. PW-2 Mr. N.P. Singh Retd. Joint DG (Administration & Work Force)
in his evidence vide Affidavit Ex.PW2/A, proved the Show Cause Notice
dated 13.06.2011 Ex.PW2/1 was served upon the Defendant No.1 seeking
refund of the Transport Allowance released to him.
26. PW-3 Sh. Girish Chandra Chaturvedi deposed on similar lines as
PW-1&PW-2 and corroborated their testimony.
27. The Defendant / Appellant Shri P.K. Chawla did not adduce any
evidence, in his defence.
28. Defendant No.2 Mr. K.U.K. Reddy examined himself as DW-1 and
tendered his Affidavit of Evidence Ex.DW1/A.
29. The learned District Judge, on appreciation of the evidence,
concluded that the Transport Allowance from 01.04.2009 to 31.08.2010,
was against the Rules. He further relied upon Chandi Prasad Uniyal vs.
State of Uttrakhand (2012) 8 SCC 417 to conclude that Defendant No.1 was
liable to refund and thereby, decreed the Suit in favour of the Plaintiff /
Respondent, against Defendant No.1.but dismissed it against Defendant
No.2.
30. Aggrieved, the Appellant/ Defendant No.1 has challenged the
Judgment on the ground that the Ld. Trial Court failed to appreciate that
the Appellant was appointed as Deputy Director (Accounts) on 02.05.2007,
promoted to Director (Internal Audit & Systems) on 17.12.2007, and
thereafter, promoted as Deputy Director General (Internal Audit) vide Order
dated 31.08.2010 with retrospective effect from 01.04.2009, entitling him to
core salary of Rs. 60,000/- with admissible allowances, from the same date.
The promotion Order itself granted admissible allowances vide Order dated
31.08.2010 w.e.f. 01.04.2009 and the Appellant continued receiving the
same; therefore, the recovery suit was not maintainable. The Respondent
No.1 never pleaded that the Appellant was not entitled to the Transport
Allowance.
31. The Appellant had submitted Request Note dated 09.09.2010, through
proper channel seeking reimbursement of Transport Allowance @ Rs.
26,000/-, in accordance with the Financial & Administrative Guidelines of
Organizing Committee, Commonwealth Games 2010, which provided
'MOBILITY SUPPORT TO OFFICERS/OFFICIALS' of Deputy Director
General level and above. The claim was approved by Respondent No.2 on
19.09.2010 for a lump sum of Rs. 4,16,500/- @ Rs. 24,500/- per month, for
the period 01.04.2009 to 31.08.2010. There was no misrepresentation or
fraud, on the part of the Appellant.
32. The reimbursement was also approved by Sh. N.P. Singh, Joint
Director General (Administration & Work Force), who forwarded the papers
to A.D.G. (F&A) for release of the payment. Further, Transport expenses for
September, October and November, 2010 were also paid to the Appellant @
Rs. 30,000/- per month, demonstrating his entitlement under the applicable
Rules.
33. If the Appellant was not entitled to retrospective reimbursement,
Respondent No.1 would not have paid Transport expenses @ Rs. 30,000/-
per month from September to November, 2010; hence, the Impugned Order
dated 30.07.2025 is liable to be quashed and set aside.
34. The Respondent No.1, vide Note dated 18.03.2011, made erroneous
observations, not based on the facts or the Rules governing disbursement of
Transport Allowance. Therefore, they are not binding upon the Appellant.
On the basis of the Note dated 18.03.2011, impugned recovery Orders dated
29.03.2011 and 13.04.2011 and Show Cause Notice dated 25.05.2011 were
issued to the Appellant, followed by a Legal/ Demand Notice.
35. It is submitted that Respondent No.1 also issued Legal Notice dated
02.03.2012 to Respondent No.2 seeking recovery of Rs. 6,24,763/- which
was replied by Respondent No. 2 vide Reply dated 19.03.2012. Further,
Respondent No.1 addressed letters dated 02.07.2012 and 14.08.2012 to the
parent department of Respondent No.2 Indian Air Force, which vide Letter
dated 17.08.2012, declined to initiate recovery proceedings against
Respondent No.2.
36. It is submitted that the Ld. Trial Court failed to consider that
Respondent No.1 itself sought recovery of Rs. 6,24,763/- from Respondent
No.2 by Legal Notice dated 02.03.2012, which was replied on 19.03.2012.
37. It is submitted that although the Ld. Trial Court observed that
Respondent No.2 could not be held liable as he did not receive the amount,
Respondent No.1 itself attempted recovery from him, which indicates
official approval of the payment. No misrepresentation or fraud was
committed by the Appellant; reliance is placed on the Judgment of the
Supreme Court in Thomas Daniel v. State of Kerala & Ors., 2022 SCC
OnLine SC 536 prohibiting recovery from an employee, in absence of fraud.
38. Hence, the Impugned Judgment dated 30.07.2025 in Civil Suit
No.177/2014, is liable to be set aside.
Submissions heard and record perused.
39. The perusal of the evidence shows that the Defendant No.1 who was
earlier employed in Engineers India Limited, was appointed by the
Organizing Committee, Commonwealth Games, Delhi 2010 as Deputy
Director (Accounts) vide Letter dated 02.05.2007. He was thereafter,
promoted to the post of Director (Internal Audit and Systems) at a
consolidated salary of Rs.35,000/- vide Letter dated 17.12.2007. Thereafter,
the Chairman promoted the Defendant No.1 to the post of Deputy Director
General (Internal Audit) w.e.f. 01.04.2009, to be paid a core salary of
Rs.60,000/- with admissible allowance w.e.f. the same day. Other terms and
conditions of his appointment, were stated to be the same, as conveyed and
accepted by him earlier.
40. This promotion of the Appellant was effected vide Letter dated
31.08.2010. The Defendant No.1 then applied on 09.09.2010 for Transport
Allowance from 01.04.2009 till 31.08.2010 @ Rs.26,000/- per month i.e. the
date from which the promotion was effective. This Note was allowed by
Defendant No.2, K.U.K. Reddy for reimbursement for the said period @
Rs.24,500/- per month. This amount was released to the Defendant No.1
vide Cheque dated 22.10.2010.
41. Thereafter, the Shunglu Committee a High-Level Committee headed
by V.K. Shunglu was set up, wherein various aberrations, were noted. It was
observed that the Transport Allowance had been wrongly released to the
Defendant No.1/ Appellant. This led to the Letters dated 09.11.2010,
27.12.2010, 18.06.2011 and 21.07.2011 to the Defendant No.1 seeking
refund of the Transport Allowance for the sum of Rs.4,16,500/-.
42. The core question is whether the amount of Rs.4,16,500/- had been
disbursed to the Appellant in accordance with the guidelines of the
Organizing Committee Ex.PW1/D rules and procedure.
43. PW-1 Shri Abrar Hussain deposed that the disbursement of the
allowance was to be made as per the Guidelines which provided that
Officers at the rank of Deputy Director General are entitled for Conveyance
Allowance. The Financial and Administrative Guidelines of the Organizing
Committee, CWG, 2010 Ex.PW1/D1 Annexure II Clause I Sub-clause (iii)
provided as under:
"Mobility Support To Officers/Officials
Officers of rank of Deputy Director General and above
will be provided vehicles for official use and for
transportation from their residence to place of work &
back from the general pool of the Organizing
Committee provided that vehicles could be provided on
full time basis to my Officer/Staff on the basis of
functional requirements with the approval of the
Chairman.
Further clause -2 of the said annexure provides as
follows:
(1) Local Travel (Travel within the limits of NCR)
i. For the purpose of local travel (within the limits of
NCR), ADGs and above would be allotted dedicated
cars. However, for the DDG level and Competition
Managers, cars would be provided for travel to and fro
from home to office and other business related travel
(within the limits of NCR). The cars for the DDG level
and Competition Managers, when not in use, would
become pool cars, which can be used by the OC for
other travel requirements.
ii. In case of dedicated cars allottcd to ADGs and above
and cars for travel to and fro from home to office and
other business related travel within the limits of NCR
for DDGs and Competition Managers, there would be a
limit on the distance travelled and the same would be
restricted to maximum 3000 kms per month. Log books
'Will have to be maintained and certified by the users
for such dedicated cars on a daily basis. Usage within
the limit need to be self-approved.
v. In case the Organizing Committee is unable to
provide transport to any employee for business-related
travel within the limits of NCR as per the approved
mode of conveyance mentioned above, the employee
may use his/her personal transport on approval from
the Functional Area Head. For any such travel, the
employees will need to submit a self-attested copy of
the original bills for all places of visit within the limit
of NCR for approval as under:"
44. From this Rule itself, it emerges that the Officers of the rank of Dy.
Director General and above, were provided for vehicle for official use and
for transportation from their residence to place of work and back, from
general pool of the Organizing Committee.
45. It is not the case of the Defendant No.1 that he was seeking the
providing of the official vehicle. His entitlement was based on Rule (v)
which provided that in case the Organizing Committee was unable to
provide the conveyance, the employee may use his personal transport on
approval from the Functional Area Head, and for any such travel, the
employee will need to submit a self-attested copy of the original Bill for all
places of visit within the limit of NCR for approval.
46. It is evident from these Rules that the entitlement of the Appellant
was to seek an official car for the office purpose for visiting places within
the NCR and the maximum distance which such official car could cover was
3000 Kms per month. In case the car was not available and the officer used
his personal car, he was required to submit a self-attested copy of the
original Bills for the place of visit for approval.
47. Admittedly, the Defendant No.1 had no copy of the Bill to
substantiate that he had been using the car for official purpose, and no such
original Bill of claim had been submitted by him, for the previous period.
48. In this context, it is also pertinent to refer to the Application dated
09.09.2010 moved by Defendant No.1 seeking reimbursement of his travel
expenses. It reads as under :
"Sub: Reimbursement of Transport Expenses
I have been promoted as DDG effective 1st April, 2009
vide office order Dated 31st August 2010 (Copy
enclosed). I had been using my personal vehicle during
the period instead of using the official vehicle. I was
incurring an expenditure of more than Rs.26,000 a
month during this period. The expenditure comprised of
(Salary of Driver Rs. 8000, Fuel expenses (petrol
Rs.10,000, average Monthly Mtc. Rs. 1000,
Depreciation Rs.5000). I request that I may be
reimbursed Rs.26,000 pm for the period in question
and same was allowed vide noting dated 19.09.2010.
In lieu of the same, an amount of Rs.4,16,500/- was
released in favour of Defendant no.1 towards the
Transport Allowance from the period 01.04.2009 to
31.08.2010 @ Rs.24,500/- per month."
49. From the bare perusal of the Application it is evident that the
Application is vague, in so much as it merely claimed a monthly expenditure
of Rs.26,000/- with a breakage of salary of driver @Rs.8,000/-, fuel
expenses @Rs.10,000/-, average monthly Rs.1,000 and Depreciation
Rs.5,000/-. There was no single document filed by the Appellant in support
of his contentions either to certify the salary of the driver, the fuel expenses
or the maintenance charges. Furthermore, though depreciation of Rs.5,000/-
was sought, but neither the make/model or registration number of the
vehicle nor the principle of alleged depreciation of the car value, was stated
in the Application.
50. As per the Rules, not only a log book was required to be maintained,
but it also had to be corroborated with the Bills and the details of travel. No
such details were provided by the Appellant, to justify his claim for
reimbursement.
51. The sole basis for the Appellant to claim the Travel Allowance was
that in his Promotion Letter dated 31.08.2010, he was held entitled w.e.f.
01.04.2009, to the admissible allowances. While the Appellant was held
entitled to allowances from the retrospective date of promotion, but he could
have claimed the allowances only in accordance with the Rules. As already
discussed, there were no Logbooks, entries or details submitted by the
Appellant to seek the Transport Allowance. There was no fixed amount
awarded to him as Transport Allowance.
52. Furthermore, it is evident that the Transport Allowance inherently,was
a reimbursement for the expenditure incurred on Transportation, for office
purposes. Unless the claim was supported by genuine documents and the
Bills, no reimbursement could have been allowed to the Appellant, as per
the Rules.
53. Another enormous situation which emerges from the testimony of the
witnesses of the Respondent, is that the Appellant had made a claim for
reimbursement @ Rs.26,000/- per month, but Defendant No.2 K.U.K.
Reddy had chosen to restrict it to Rs.24,500/-. Though he had appeared as
DW-1, but nothing from his evidence can be extracted to justify on which
basis did he reduce the amount to Rs.24,500/-.
54. In this regard it is also pertinent to refer to testimony of PW-3 Shri
Girish Chandra Chaturvedi who, being Special DG (F&A), was the Head of
Finance and Accounts, Functional Area. He deposed that he had noted his
objections on file on 18.03.2011 Ex.PW2/2 as under :
"It is unfortunate that the then ADG (FEA), Shri KUK
Reddy noted 'Discussed' on the file without discussing
it
with me and got the payment done. I had and still have
the following objections :
(i) Allowance like Conveyance Allowance are not paid
retrospectively;
(ii) On what basis the amount of Rs.24,500l- per
month decided when FA (Office Administration) had
been paying only Rs.20,000/- per month to other
availing of this allowance with proper permission.
Prima-facie, the promotion of Shri Chawla with
retrospective effect itself was not warranted. It is
completely arbitrary order without any processing on
the
basis of the performance. On the top of it, claiming of
conveyance allowance by Shri Chawla with
retrospective effect compounded the aberration. Both
FA, (Office Administration) and Finance 8: Accounts
did not examine the proposal properly.
It is proposed that the amount be recovered from Shri
Chawla. If this attempt fails, the amount may be
recovered from Shri Reddy who in spite of my query
went ahead and paid."
55. PW-2 Shri Bharat Prasad Dy. Director General (Finance & Accounts)
had also corroborated the testimony of PW-3 Shri Girish Chandra
Chaturvedi in regard to Note not having been discussed with PW-3 and that
the reimbursement had been allowed by K.U.K. Reddy against the
guidelines of Reimbursement. He further deposed that he had issued a Show
Cause Notice dated 13.06.2011 Ex.PW2/1 to K.U.K. Reddy and sought
explanations as to why the amount of Rs.4,16,500/- towards Transport
Allowance had been unauthorizedly ordered to be released to P.K. Chawla.
56. The overwhelming evidence and the Rules, as discussed above,
established that the Defendant No.1 though promoted retrospectively from
01.04.2009, but he could not claim for retrospective Transport Allowance,
without submitting the expenditure Bills, which had been erroneously
sanctioned against the guidelines and had been and even released to him.
57. Having so noted, the most pertinent question which arises is whether
the refund of the amount so released to the Appellant/Defendant No.1, could
be directed to be recovered from him, especially when it is not a case of
fraud, but misapplication of the Rules.
58. The Apex Court in Thomas Daniel (supra) observed that if the excess
amount was not paid on any mis-representation or fraud of the employee or
if it was made by applying a wrong principle for calculating the
pay/allowance or on the basis of a particular interpretation of Rule or Order
which is subsequently found to be erroneous, such excess payment of
emoluments or allowances are not recoverable. The justification given was
that such recovery is not to be granted, not because of the right of the
employee, but in equity exercising judicial discretion to provide relied to the
employees from the hardship that would be caused if the recovery is
ordered. It was further qualified if in a given case, it is proved that the
employee had knowledge that the payment receipt was in excess of what
was due or wrongly paid or in cases where error is detected or corrected
within a short time of payment, the matter being in the realm of judicial
discretion, the Court may on the facts and circumstances of a particular
case, order the recovery of the amount paid in excess.
59. The Supreme Court in the case of Col. B.J. Akkara (Retd.) vs.
Government of India and Others(2006) 11 SCC 709 while considering the
identical question, held that the recovery of excess wrong payment of the
emoluments/ allowances from an employee, may be made if following
conditions are satisfied:
(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.
28. Such relief restraining back recovery 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 from the hardship
that will be caused if recovery is implemented. A
government servant, particularly one in the lower ranks
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.
29....."
60. Similarly, in the case of Syed Abdul Qadir and Others vs. State of
Bihar and Others(2009) 3 SCC 475 the Apex Court held that where the
excess payment was made on account of the mistake or wrong interpretation
of the Rules, the recovery of excess payment should not be ordered,
especially when the employee has subsequently retired.
61. The principles were thus, crystalized in the case of State of Punjab
and Others vs. Rafiq Masih (White Washer) and Others (2015) 4 SCC 334,
as under :
"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, 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."
62. The Apex Court in Chandi Prasad Uniyal vs. State of Uttarakhand
(2012) 8 SCC 417 reiterated as under :
"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
over-payment 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 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."
63. The aforesaid Judgments, therefore, make it abundantly clear that
where the error occurs on account of wrong application or misinterpretation
of the Rules, the recovery may be sought provided it is initiated soon after
the reimbursement. In the present case, the wrong reimbursement of the
Transport Allowance was made to the Appellant/Defendant No.1 on
19.09.2010 and the recovery of the same was sought though Letter dated
11.03.2011; there was no delay on the part of the Organizing Committee,
Commonwealth Games to seek the amount that had been wrongly disbursed
in favour of the Plaintiff. Moreover, reasonable opportunity was given to the
Appellant to provide the explanation.
64. The Learned District Judge, therefore, rightly held that the
Respondent/ Plaintiffs were entitled to recovery of the excess payment made
to the Appellant.
65. The Learned District Judge in his discretion considered granting
interest @ 3% per annum, considering that the Appellant was a Senior
Citizen who had been contesting the Suit for 13 years since 2014 in the
Court. However, it is writ large on the face of the record, that there is no
misconduct attributable to the Appellant and awarding interest, would be
putting a premium on the mistake of the Respondent. Therefore, it is held
that no grant of interest is justified, in the circumstances.
66. It is thus, held that the Ld. District Judge has rightly decreed the Suit
against the Appellant, for recovery of Rs.4,16,500. However, it is held that
the Respondent is not entitled to any interest on the principal amount. The
impugned decree is accordingly, modified.
67. The Appeal along with the pending Application(s) is disposed of,
accordingly.
(NEENA BANSAL KRISHNA)
JUDGE
MARCH 12, 2026
R
