Gujarat High Court

Chhotalal S/O Laljibhai Kotak vs Rajkot Municipal Corporation on 25 November, 2025

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                           C/SCA/3173/2018                                                 JUDGMENT DATED: 25/11/2025

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                                    IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                                     R/SPECIAL CIVIL APPLICATION NO. 3173 of 2018


                      FOR APPROVAL AND SIGNATURE:


                      HONOURABLE MR. JUSTICE MAULIK J.SHELAT
                      ==========================================================

                                   Approved for Reporting                                 Yes           No
                                                                                                        ✓
                      ==========================================================
                                            CHHOTALAL S/O LALJIBHAI KOTAK
                                                        Versus
                                         RAJKOT MUNICIPAL CORPORATION & ANR.
                      ==========================================================
                      Appearance:
                      MR. GAURAV A. GOGIA ON BEHALF OF MS. MUSKAN A. GOGIA WITH
                      MR. BB GOGIA(5851) for the Petitioner(s) No. 1
                      MR HS MUNSHAW(495) for the Respondent(s) No. 1,2 - CORPORATION
                      ==========================================================

                         CORAM:HONOURABLE MR. JUSTICE MAULIK J.SHELAT

                                                             Date : 25/11/2025
                                                             ORAL JUDGMENT

1. Rule returnable forthwith. Learned advocate

appearing for the respondents waives service of notice of

rule on behalf of respondents.

2. Heard Mr. Gaurav A. Gogia, learned counsel

appearing on behalf of Ms. Muskan A. Gogia, learned

counsel with Mr. B.B. Gogia, learned counsel for the

petitioner, and Mr. Kirit Patel, learned advocate

appearing on behalf of Mr. H.S. Munshaw, learned

counsel for the respondents. With consent of the parties,

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the matter is taken up for final hearing.

3. The present writ petition is filed by the present

petitioner under Article 226 of the Constitution of India,

inter alia, seeking the following reliefs:

"A. YOUR LORDSHIPS may be pleased to admit and allow this petition.

B. YOUR LORDSHIPS be pleased to hold and declare and direct that the Communicated letter dated 12.01.2018 Vide No. Ra Ma Na Paa/Hisabi/JA No. 1716 (Annexure A) is illegal, invalid and contrary to law which may be quashed and set aside. And Respondents be directed to not give effect to recovery of the amount as stated in letter dated12.01.2018 (Annexure-A) from the petitioner and his pension amount.

C. Pending admission, hearing and final disposal of this petition, Respondent may please be restrained from recovering the amount of Rs 3,62,310/ or any other amount as stated in letter dated 12.01.2018 (Annexure A) from the petitioner or the from the amount of pension payble to him every month and from reducing his pay or pension granted by Memo dated 20.05.2013, 13.06.2013, 17.06.2013 (Annexure B,C, D,E).

D. To pass any other Order or Order(s) which may be

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deemed to fit in the interest of the justice."

4. SUBMISSIONS ON BEHALF OF PETITIONER:

4.1 At the outset, learned counsel Mr. B.B. Gogia would

submit that undisputedly, petitioner was not afforded any

opportunity of hearing when the impugned communication

dated 12.01.2018 was served upon him by the

respondent, whereby recovery of Rs. 3,62,310/- has been

sought from him. So, decision of respondent authority

would suffers from violation of principles of natural

justice then, requires to be quashed and set aside.

4.2 Learned counsel Mr. Gogoi would submit that

petitioner was working as a Deputy Executive Engineer

with the respondent Corporation, having retired from his

service on 30.11.2007 reaching the age of superannuation,

and recovery was sought in the year 2018, which is

nothing but unauthorized and illegal action on the part

of the respondent Corporation.

4.3 Learned counsel Mr. Gogoi would respectfully submit

that as per Rule 28-A of the Gujarat Civil Services (Pay)

Rules, 2002, the respondent Corporation was not

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authorized to recover any amount, that too from the

pension of petitioner. It is respectfully submitted that as

per the reply and the documents submitted therewith,

there was the alleged wrong fixation of pay scale of

petitioner by the respondent Corporation resulted into the

aforesaid recovery. It is respectfully submitted that as

per the settled legal position of law, mere wrong fixation

of pay scale would not be a ground for recovery of the

amount from the petitioner, who is already retired from

service.

4.4 Learned counsel Mr. Gogoi would respectfully submit

that as per the recent decision of the Hon'ble Apex

Court in the case of Jogeswar Sahoo and Others versus

District Judge, Cuttack and Others reported in AIR 2025 SC 2291, more particularly, paragraphs 8 to 10 thereof,

when principles of natural justice have been violated by

the respondent Corporation and the petitioner is already

retired from service, and that too in the year 2007, the

impugned communication dated 12.01.2018 is required to

be quashed and set aside. It is respectfully submitted

that when there is no mala fide/fraud, and/or any

misrepresentation by petitioner in getting the benefit

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from service, the respondent employer has no right to

recover the amount, may be paid on a mistaken decision,

i.e., wrong fixation of the pay scale of petitioner.

4.5 Making the above submissions, learned cdvocate Mr.

Gogia would request this Court to allow the present writ

petition.

5. SUBMISSIONS ON BEHALF OF THE

RESPONDENTS:-

5.1 Per contra, Mr. Kirit Patel, learned advocate

appearing on behalf of Mr. H.S. Munshaw, learned

counsel for the respondents would respectfully submit

that the petitioner although retired from service in the

year 2007, but the order of pay fixation of petitioner was

passed in the year 2013, wherein, later on in audit

found that there is some irregularity noted in the

fixation of pay scale of petitioner, thereby the respondent

Corporation subsequently decided to recover the excess

amount, so paid to the petitioner due to wrong fixation

of pay. It is respectfully submitted that when there is

any wrong benefit granted to the petitioner on the

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premise of fixation of the wrong pay scale, the

respondent Corporation is well within its right to recover

the amount.

5.2 Learned counsel Mr. Patel would respectfully submit

that there is no ill-intention on the part of the

respondent Corporation seeking recovery from the

petitioner, and as such, it is not even a case of

petitioner that the pay fixed by the respondent

Corporation in the year 2013 was just and proper. It is

submitted that after completion of the audit and to

resolve the audit query, it was decided to recover the

excess amount, so paid to the petitioner by way of the

impugned communication dated 12.01.2018, which should

not be disturbed by this Court while exercising its discretionary power.

5.3 Making the above submissions, learned AGP Mr.

Patel would request this Court to dismiss the present

writ petition.

5.4 No other and further submissions are made.

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ANALYSIS:-

6. Heard learned counsels for the respective parties at

length. The facts which emerge from the record and the

submissions of the respective learned counsels as follow;

6.1 Petitioner got retired from service on 30.11.2007;

thereafter, there was a revision of his pay fixed on

20.05.2013 whereby he was granted a higher pay scale.

6.2 The audit query raised some concern about the

wrong fixation of pay scale of petitioner in the year

2015; thereby, ultimately, the respondent Corporation

decided to recover the excess amount paid to the

petitioner from his pension vide the impugned communication dated 12.01.2018.

6.3 Nonetheless, before affecting such recovery,

undisputedly, no opportunity of hearing has been afforded

to the petitioner. Likewise, it is not even remotely the

case of the respondent Corporation that while pay was

fixed by the respondent Corporation on 20.05.2013, any

fraud or misrepresentation was made by the petitioner to

get undue benefit from the respondent Corporation.

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7. So, keeping the aforesaid facts and circumstances in

mind, it would be apt to refer to the recent decision of

the Hon'ble Apex Court in the case of Jogeswar Sahoo

(supra), wherein after referring its previous decisions, it

held thus;

"8. The law in this regard has been settled by this Court in catena of

judgments rendered time and again; Sahib Ram vs. State of Haryana, 1995

Supp1 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 vs.

Regional Jt. Director, 1997 6 SCC 139 and in a recent decision in the matter

of Thomas Daniel vs. State of Kerala & Ors.,2022 SCCOnlineSC 536.

9. This Court has consistently taken the view that if the excess amount was

not paid on account of any misrepresentation or fraud on the part of the

employee or if 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 excess payments of emoluments or allowances are not

recoverable. It is held that such relief against the recovery is not because of

any right of the employee but in equity, exercising judicial discretion to

provide relief to the employee from the hardship that will be caused if the

recovery is ordered.

10. In Thomas Daniel (supra), this Court has held thus in paras 10, 11,

12 and 13:

"10. In Sahib Ram v. State of Haryana1 this Court restrained

recovery of payment which was given under the upgraded pay scale

on account of wrong construction of relevant order by the authority

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concerned, without any misrepresentation on part of the employees.

It was held thus:

"5. Admittedly the appellant does not possess the required

educational qualifications. Under the circumstances the

appellant would not be entitled to the relaxation. The

Principal erred in granting him the relaxation. Since the

date of relaxation, the appellant had been paid his salary on

the revised scale. However, it is not on account of any

misrepresentation made by the appellant that the benefit of

the higher pay scale was given to him but by wrong

construction made by the Principal for which the appellant

cannot be held to be at fault. Under the circumstances the

amount paid till date may not be recovered from the

appellant. The principle of equal pay for equal work would

not apply to the scales prescribed by the University Grants

Commission. The appeal is allowed partly without any order

as to costs."

11. In Col. B.J. Akkara (Retd.) v. Government of India reported in

(2006) 11 SCC 709 this Court considered an identical question as

under:

"27. The last question to e considered is whether relief

should be granted against the recovery of the excess

payments made on account of the wrong

interpretation/understanding of the circular dated 7-6-1999.

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 v. State of Haryana [1995 Supp (1) SCC 18 : 1995 SCC

(L&S) 248], Shyam Babu Verma v. Union of India [(1994) 2

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SCC 521 : 1994 SCC (L&S) 683 : (1994) 27 ATC 121],

Union of India v. M. Bhaskar [(1996) 4 SCC 416 : 1996 SCC

(L&S) 967] and V. Gangaram v. Regional Jt. Director

[(1997) 6 SCC 139 : 1997 SCC (L&S) 1652]):

(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 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.

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29. 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 the respondents shall not recover

any excess payments made towards pension in pursuance of

the 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."

12. In Syed Abdul Qadir v. State of Bihar excess payment was sought

to be recovered which was made to the appellants-teachers on

account of mistake and wrong interpretation of prevailing Bihar

Nationalised Secondary School (Service Conditions) Rules, 1983.

The appellants therein contended that even if it were to be held that

the appellants were not entitled to the benefit of additional increment

on promotion, the excess amount should not be recovered from them,

it having been paid without any misrepresentation or fraud on their

part. The Court held that the appellants cannot be held responsible

in such a situation and recovery of the excess payment should not be

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ordered, especially when the employee has subsequently retired. The

court observed that in general parlance, recovery is prohibited by

courts where there exists no misrepresentation or fraud on the part

of the employee and when the excess payment has been made by

applying a wrong interpretation/understanding of a Rule or Order. It

was held thus:

"59. Undoubtedly, the excess amount that has been paid to

the appellant teachers was not because of any

misrepresentation or fraud on their part and the appellants

also had no knowledge that the amount that was being paid

to them was more than what they were entitled to. It would

not be out of place to mention here that the Finance

Department had, in its counter- affidavit, admitted that it

was a bona fide mistake on their part. The excess payment

made was the result of wrong interpretation of the Rule that

was applicable to them, for which the appellants cannot be

held responsible. Rather, the whole confusion was because

of inaction, negligence and carelessness of the officials concerned of the Government of Bihar. Learned counsel

appearing on behalf of the appellant teachers submitted that

majority of the beneficiaries have either retired or are on the

verge of it. Keeping in view the peculiar facts and

circumstances of the case at hand and to avoid any hardship

to the appellant teachers, we are of the view that no recovery

of the amount that has been paid in excess to the appellant

teachers should be made."

13. In State of Punjab v. Rafiq Masih (White Washer) wherein this

court examined the validity of an order passed by the State to

recover the monetary gains wrongly extended to the beneficiary

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employees in excess of their entitlements without any fault or

misrepresentation at the behest of the recipient. This Court

considered situations of hardship caused to an employee, if recovery

is directed to reimburse the employer and disallowed the same,

exempting the beneficiary employees from such recovery. It was held

thus:

8. As between two parties, if a determination is rendered in

favour of the party, which is the weaker of the two, without

any serious detriment to the other (which is truly a welfare

State), the issue resolved would be in consonance with the

concept of justice, which is assured to the citizens of India,

even in the Preamble of the Constitution of India. The right

to recover being pursued by the employer, will have to be

compared, with the effect of the recovery on the employee

concerned. If the effect of the recovery from the employee

concerned 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 employee's right would outbalance, and

therefore eclipse, the right of the employer to recover.

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18. 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

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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.

(emphasis supplied)"

8. Thus, considering the dictum of the aforesaid

decision, having apply to the case on hand, it would be

clear that the respondent Corporation could not have

affected recovery of any excess amount inadvertently paid

to the petitioner, that too without affording any

opportunity of hearing and from his pension, as the case

may be. When it is not proved on record that there is

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any fraud or misrepresentation by petitioner in getting

any undue advantage when his pay scale was fixed post-

retirement, it is not permissible in law to affect the

recovery from his pension.

CONCLUSION:-

9. So, in view of foregoing reasons, the recovery sought

for by way of the impugned communication is considered

to be an illegal one and hence, it requires to be quashed

and set aside by this Court which I do so.

9.1 Consequently, the impugned communication dated

12.01.2018 vide No. Ma Na Paa/Hisabi/JA No.1716

[Annexure-A] passed by the respondent Corporation

seeking recovery of Rs. 3,62,310/- from the pension of

petitioner is hereby quashed and set aside.

9.2 Nonetheless, it is hereby observed and clarified that

if any recovery was actually effected by the respondent

Corporation from the petitioner in pursuance to the

aforesaid impugned communication dated 12.01.2018, the

same shall be re-paid to petitioner within 15 days from

the date of receipt of copy of this order.