Gujarat High Court
F.S. Rayma vs High Court Of Gujarat on 15 November, 2021
Bench: Nikhil S. Kariel
C/SCA/10427/2008 JUDGMENT DATED: 15/11/2021
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 10427 of 2008
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE NIKHIL S. KARIEL Sd/-
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ? YES
2 To be referred to the Reporter or not ?
NO
3 Whether their Lordships wish to see the fair copy
of the judgment ? NO
4 Whether this case involves a substantial question
of law as to the interpretation of the Constitution NO
of India or any order made thereunder ?
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F.S. RAYMA
Versus
HIGH COURT OF GUJARAT & 1 other(s)
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Appearance:
MR SAMIR B GOHIL(5718) for the Petitioner(s) No. 1
LAW OFFICER BRANCH(420) for the Respondent(s) No. 1,2
MS TRUSHA K PATEL(2434) for the Respondent(s) No. 1,2
MR UTKARSH SHARMA, AGP for Respondent No.3
RULE SERVED BY DS(65) for the Respondent(s) No. 3
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CORAM:HONOURABLE MR. JUSTICE NIKHIL S. KARIEL
Date : 15/11/2021
ORAL JUDGMENT
1. Heard learned Advocate Mr.Samir Gohil on behalf of the petitioner,
learned Advocate Ms.Trusha Patel on behalf of the respondent Nos.1
and 2 and learned AGP Mr.Utkarsh Sharma on behalf of the respondent
C/SCA/10427/2008 JUDGMENT DATED: 15/11/2021
No.3.
2. By way of this petition, the petitioner challenges an order dated
28.2.2007 passed by the respondent No.2 Principal District Judge,
Kachchh at Bhuj, whereby the request of the petitioner for grant of
higher pay-scale as well as for refund of amount recovered from the
pension of the petitioner and interest on delayed payment of pensionary
benefits has been rejected.
3. The petitioner, who was at the relevant point of time working as a
Registrar under respondent No.2, came to be retired vide an Office
Order dated 4.11.2003 on 30.11.2003 upon reaching the age of
superannuation. It appears that the petitioner, during the period when he
was in service, had been granted first higher pay-scale w.e.f. 21.8.1989
and whereas vide an order dated 3.11.2003 i.e. just prior to the
retirement of the present petitioner, the order of grant of first higher pay-
scale had been cancelled and the petitioner had been placed in the scale
of Rs.1200-2040 from Rs.1400-2600. It was also mentioned that any
amount paid to the petitioner in excess i.e. on account of grant of first
higher pay-scale should be recovered from the petitioner. It appears that
while calculating the dues and processing the pension papers of the
petitioner upon his retirement, an amount of Rs.31,089/- had been
deducted from the gratuity of the present petitioner, which amount was
the amount over-paid to the petitioner, according to the respondent
Authorities, on account of erroneousgrant of first higher pay-scale. It
further appears that the petitioner, at the relevant point of time, had
challenged the recovery as well as the cancellation of first higher pay-
scale and non-grant of interest on delayed payment of pensionary
benefits by preferring a writ petition being Special Civil Application
No.1267 of 2006. It further appears that a Coordinate Bench of this
Court (Coram: Akil Kureshi, J.) vide an order dated 28.7.2006 had
permitted the petitioner to prefer a representation with regard to the
C/SCA/10427/2008 JUDGMENT DATED: 15/11/2021
grievance which the petitioner had, to the respondent No.2. It further
appears that pursuant to the order of this Court dated 28.7.2006, the
petitioner had preferred a representation to the respondent No.2 on
19.12.2006. That the respondent No.2 vide the impugned order dated
28.2.2007 had rejected the representation preferred by the present
petitioner mainly on the ground that since the petitioner had got two
promotions he would not be entitled to higher pay-scale.
4. Learned Advocate Mr.Gohil appearing on behalf of the petitioner would
submit that by way of this petition, the petitioner is not contesting the
impugned order insofar as the entitlement of the petitioner for grant of
first higher pay-scale is concerned, rather the learned Advocate would
draw the attention of this Court to the prayer whereby the petitioner is
seeking refund with interest of Rs.31,089/- deducted from the gratuity of
the petitioner. The petitioner is also seeking interest on delayed
payment of retiral benefits. Learned Advocate Mr.Gohil has relied upon
the decision of the Hon'ble Apex Court in case of State of Punjab Vs.
Rafiq Masih (White Washer), reported in (2015) 4 SCC 334, more
particularly paragraph No.12 thereof, whereby the Hon'ble Apex Court
has laid down the law that there shall not be any recovery from retired
employees or from the employees, who are about to retire, within one
year of the date of their retirement on superannuation. Learned
Advocate would submit that the petitioner having retired on 30.11.2003
and whereas the recovery had been affected in the year 2004 by
deducting the amount in question from the gratuity of the petitioner,
therefore, the law laid down by the Apex Court would be squarely
applicable. Learned Advocate would further submit that while the
petitioner had retired on 30.11.2003, the amount in lieu of commuted
pension, the amount in lieu of gratuity and arrears of pension as well as
leave encashment had been paid to the petitioner on various dates in the
year 2004, and therefore, the petitioner being a retired employee is
C/SCA/10427/2008 JUDGMENT DATED: 15/11/2021
entitled for payment of interest on delayed payment of retiral benefits as
stated herein above.
5. Learned Advocate Ms.Trusha Patel would strongly contest this petition
by submitting that as such the recovery had been affected by deducting
the amount in question from the gratuity of the petitioner upon a waiver
by the petitioner himself. The learned Advocate would submit that vide
a communication dated 26.9.2003, the petitioner had requested the
respondents to grant the higher pay-scale, which according to the
petitioner, he was entitled to. Learned Advocate would submit that later
vide communication dated 14/15.10.2003, the petitioner had requested
the respondents to deduct any amount over-paid from the pension or
gratuity of the present petitioner. Learned Advocate would submit that
having waived all his rights and having consented for the recovery, it
would not be open for the petitioner to turn around and contend that the
recovery was bad in law. Learned Advocate Ms.Patel would further
submit that as such this would not be a case of recovery stricto sensu
more particularly since the amount in question did not reach the
petitioner. To elaborate, Ms.Patel would submit that the amount in
question had been deducted from the gratuity of the petitioner when the
amount had not yet been disbursed to the petitioner, and therefore, it
could not be said to be 'recovery' from the petitioner and according to
her, the law laid down by the Apex Court in case of State of Punjab Vs.
Rafiq Masih (supra) may not be applicable. Learned Advocate
Ms.Patel has attempted to distinguish this issue by submitting that in a
later judgement in case of High Court Punjab and Haryana & Ors.
Vs. Jagdev Singh (in Civil Appeal No.3500 of 2006), the Apex Court
had taken a view that while making any payment, if the
employee/officer had furnished an undertaking that in case it was found
that the payment was made in excess, then the employee/officer would
refund the same, and such employee/officer can not later turn around
C/SCA/10427/2008 JUDGMENT DATED: 15/11/2021
and question the undertaking itself. The employee is bound by the
undertaking and he is required to abide by the same. Learned Advocate
Ms.Patel would submit that since the petitioner had waived his right and
had requested the respondent Authorities to recover the amount over-
paid to him, and therefore, the petitioner would stand on the same
footing as a person, who had given an undertaking and it would not be
open to contend that the amount had been wrongly recovered. Learned
Advocate would, therefore, submit that the petition being devoid of
merits is required to be rejected.
6. Learned AGP Mr.Utkarsh Sharma appearing for the respondent State
has also vehemently contested this petition by submitting that since the
amount in question had been paid in excess to the petitioner and the
amount was not a 'recovery' as such, since the amount has never
reached the present petitioner as contended by learned Advocate
Ms.Patel, and therefore, the law laid down by the Apex Court in the
above referred decision may not be applicable. Learned AGP has
further supported the order passed by the respondent No.2 and has
submitted that no error has been committed by the respondent No.2,
which calls for interference by this Court.
7. Heard the learned Advocates for the parties. The only questions that are
required to be considered by this Court are 'whether the amount of
Rs.31,089 deducted from the gratuity of the petitioner ought to be
refunded to the petitioner along with interest or not ?' and 'would the
petitioner be entitled to the payment of interest upon various heads of
retiral benefits being paid to him after delay ?'.
8. So far as the issue of interest on delayed payment is concerned, it
appears that vide the impugned order, the issue though raised by the
petitioner in his representation, has not been touched upon by the
respondent No.2. In any case, it clearly appears that the petitioner had
C/SCA/10427/2008 JUDGMENT DATED: 15/11/2021
been paid amount of commuted pension on 5.2.2004, amount of leave
encashment on 18.3.2004, amount of gratuity on 5.7.2004, and arrears of
pension from December 2003 to June 2004 on 5.7.2004. Thus, it
appears that the amount of pension and gratuity has been paid to the
petitioner after a few months later from the date of retirement of the
petitioner on 30.11.2003. Since there is no reason coming out in the
order passed by the respondent No.2 impugned in the petition that delay
in payment of the said benefits could be attributed to the present
petitioner, and therefore, the aspect of interest on delayed payment of
retiral benefits on various heads is almost undisputed. Furthermore, it
also appears that the State Government has passed a Resolution dated
8.12.1994 whereby it is clarified that in case of delayed payment of
D.C.R.G. (Death-cum-Retirement Gratuity) to a retired employee, then
the Government shall pay interest at the rate of 12% annually on the
delayed payment of D.C.R.G. to the employee concerned. Under such
circumstances, the petitioner would be entitled to payment of interest on
delayed payment of gratuity and the petitioner would also be entitled to
interest for delayed payment of retiral benefits from the date of
entitlement till the date of actual payment.
9. As regards the issue of recovery, as such in the considered opinion of
this Court, the issue is squarely covered by the decision of the Apex
Court in case of State of Punjab Vs. Rafiq Masih (supra). Learned
Advocate Ms.Patel appearing on behalf of the respondent Nos.1 and 2
has tried to contend that since the petitioner had waived his right and
had requested the respondents to deduct the amount of Rs.31,089/- from
the pensionary benefits of the petitioner, he would stand on the same
footing as a person, who has given an undertaking to refund any amount
paid to him in excess, as held by the Apex Court in case of High Court
of Punjab and Haryana & Ors. Vs. Jagdev Singh (supra), and
therefore, the petitioner would not be entitled to refund of the recovered
C/SCA/10427/2008 JUDGMENT DATED: 15/11/2021
amount. In the considered opinion of this Court, both the aspects have
to be seen separately. The case of an employee, who is to be paid any
amount on condition, by way of an undertaking, that he would return the
same, if it is found to be in excess cannot be compared to the case of the
present petitioner, who had written a letter dated 14-15.10.2003, more
particularly on the eve of his retirement. Upon request of this Court,
letter dated 14/15.10.2003 has been provided to this Court along with
letter dated 26.9.2003, both written by the present petitioner. Perusal of
the letter dated 14/15.10.2003, which is being relied upon by Ms.Patel
reveals that while the petitioner had reserved his rights with regard to
earlier communication dated 26.9.2003, what is more striking is the fact
that the petitioner wanted to get his pension papers cleared by the time
he retired i.e. on 30.11.2003. The petitioner has in his letter dated
14/15.10.2003 clearly stated that he reserves his right to contest with
regard to his entitlement, whereas according to learned Advocate
Ms.Patel, since the petitioner has reserved his right with regard to
entitlement only, therefore, he may not be permitted to contest for the
recovery. In the considered opinion of this Court, that would be a very
narrow view to take, more particularly as observed by this Court herein
above, the communication dated 14/15.10.2003 had been written by the
petitioner on the eve of his retirement, asking the respondents to process
his pension papers at the earliest and to facilitate such process, the
petitioner had agreed for his pay-scale to be re-fixed and the amount
with regard to excess payment to be recovered from the petitioner.
Thus, the petitioner having reserved his right though not using very
exact terminology, could not be said to have waived his right with
regard to recovery of the amount in question.
10. At this stage, it would be pertinent to refer to the observations of the
Apex Court in case of State of Punjab Vs. Rafiq (supra). The Hon'ble
Apex Court has observed with regard to the right to recover by the
C/SCA/10427/2008 JUDGMENT DATED: 15/11/2021
employee that "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 situation, the employees right would outbalance, and therefore
eclipse, the right of the employer to recover."
11. The Apex Court had also referred to the observation of the Apex Court
in case of Syed Abdul Qadir v. State of Bihar, reported in (2009) 3
SCC 475 more particularly paragraph No.59 thereof, wherein the Apex
Court had observed as under:-
"Premised on the legal proposition considered above, namely,
whether on the 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 Qadirs 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
C/SCA/10427/2008 JUDGMENT DATED: 15/11/2021
superannuation, in our considered view, should be accepted as the
period during which the recovery should be treated as iniquitous.
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 employees retirement, or
within one year of the date of his retirement on superannuation."
12. In view of the law laid down by the Apex Court more particularly the
discussion referred to herein above, this Court is of the opinion that,
when there is no contention on part of the employer that the amount
over-paid was on account of any misrepresentation on part of the
petitioner and since this Court does not accept the contention on part of
the learned Advocate Ms.Patel for the respondents that the letter dated
14/15.110.2003 whereby the petitioner had requested for the amount to
be recovered from his pension or gratuity, would stand on the same
footing as an undertaking given by the employee while receiving any
payment from the employer as noted in case of High Court Punjab and
Haryana & Ors. Vs. Jagdev Singh (supra), in the considered opinion
of this Court, the hardship and the prejudice that would be caused to the
present petitioner if the amount is recovered would outbalance the rights
of the employer to recover the same more particularly on account of the
fact that the present petitioner had already retired, and therefore, the
Court deems it appropriate that the amount of Rs.31,089/- recovered
from the gratuity of the petitioner is required to be refunded back.
13. As regards the contention of the learned Advocate Ms.Patel that the
ratio of the judgement in case of State of Punjab and Haryana Vs.
Rafiq Masih may not be applicable in the instant case since the
amount in question i.e. the amount of gratuity did not reach the
petitioner, and therefore, it could not be 'recovery' in stricto sensu, the
said contention can not be countenanced. 'Recovery' is of the amount
which has been over-paid to the petitioner on account of erroneous
C/SCA/10427/2008 JUDGMENT DATED: 15/11/2021
fixation/grant of first higher pay-scale, the said amount has already
been paid to the present petitioner much prior to the date of his
retirement. The amount of retiral benefits including the amount of
gratuity from which the said amount was recovered was the amount
due to the petitioner, for having worked with the respondents and
merely because the amount of gratuity had not been disbursed to the
petitioner and the respondent Government directly deducting would not
alter the status of the deduction as being a recovery. Deducting the
amount over-paid to the present petitioner from the said amount, is
nothing but recovery from the petitioner himself. 'Recovery', in the
considered opinion of this Court, would be when the amount which was
already paid to the employee is sought to be recovered from the
employee by the employer. Merely because of the fact that since the
petitioner was retiring at the relevant point of time and since some
amounts were due to the petitioner, deducting the same from the retiral
benefits of the petitioner, would not permit the respondents to state that
it was not 'recovery' as such. In the considered opinion of this Court,
for being qualified as recovery, it is not a prerequisite that the petitioner
himself has to make the payment as sought to be contended by the
respondents. Any amount sought to be recovered from an employee is
recovery and it is just a fortuitous circumstance that the petitioner was
retiring and hence the recovery could be effected by deducting the
amount from the amount of gratuity due to the petitioner. Thus, it can
be said that the amount sought to be recovered from the petitioner by
the respondents had been deducted from the gratuity of the present
petitioner. As such, in the considered opinion of this Court, there could
not be any doubt with regard to the fact that the amount deducted from
the gratuity of the petitioner was, in fact, recovery and therefore, the
law laid down by the Apex Court in the case of State of Punjab and
Haryana Vs. Rafiq (supra) would be squarely applicable. Under such
circumstances, the order dated 28.2.2007 passed by the respondent
C/SCA/10427/2008 JUDGMENT DATED: 15/11/2021
No.2, so far it rejects the request of the petitioner for refund of the
amount recovered and so far it does not make any observations with
regard to payment of interest on delayed payment of pensionary
benefits, is quashed and set aside. The respondents are directed to
refund the amount of Rs.31,089/- deducted from the gratuity of the
petitioner with interest at the rate of 12% p.a.. As regards interest on
delayed payment of retiral benefits under various heads, the petitioner
would be entitled to interest @ 8% per annum on delayed period, i.e.
from the date of entitlement to the date of actual payment. All
payments to be made to the petitioners within a period of six weeks
from the date of receipt of this order.
14. With the above observations and directions, the present petition is
disposed of as allowed. Rule is made absolute to the aforesaid extent.
Sd/-
(NIKHIL S. KARIEL,J)
V.V.P. PODUVAL
