Decided On: October 9 vs Himachal Pradesh State ...
2023 Latest Caselaw 15737 HP

             IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA.

                                                    CWP No. 383 of 2023
                                            Decided on: October 9, 2023
    ________________________________________________________
    Sant Ram                                            ........... Petitioner




                                                                                .
                                       Versus





    Himachal Pradesh State Electricity Board Ltd. and others
                                                         .... Respondents
    ________________________________________________________
    Coram:





    Hon'ble Mr. Justice Sandeep Sharma, Judge.
    Whether approved for reporting? 1 Yes.

    For the Petitioner                     :      Ms. Shikha Chauhan, Advocate.

    For the respondents                    :
                                  Mr. Raj Pal Singh Thakur, Advocate,





                                  for respondents Nos. 1 and 2.
                                  Mr. Sunil Mohan Goel, Advocate, for
                                  respondent No.3.
    ________________________________________________________
    Sandeep Sharma, Judge (oral):

This is case of extreme hardship, where an amount of

Rs.7,35,465/- has been debited from the bank account of the petitioner

maintained with respondent No.3, on account of alleged excess

payment of pension. Vide communication dated 14.12.2022 (Annexure

RA-4) Accounts Officer, (Pension) F&A wing, Himachal Pradesh State

Electricity Board Limited Shimla (hereinafter, 'respondent Board')

instructed Branch Manager, Himachal Pradesh State Co-operative

Bank Limited, The Mall, Shimla (hereinafter, 'respondent No.3') to

recover an amount of Rs.7,35,465/- from the petitioner alongwith

interest. Respondent-Bank, that too without affording an opportunity of

hearing to the petitioner, debited the amount and credited the same in

the account of the respondent-Board. It is pertinent to take note of the

fact that aforesaid recovery came to be effected from bank account of

Whether the reporters of the local papers may be allowed to see the judgment?

petitioner after seventeen years of his retirement and as such, he is

compelled to approach this court in the instant proceedings filed under

Art. 226 of the Constitution of India, praying therein for following relief

.

"a. That the impugned order of recovery, vide ANNEXURE P-1, may

kindly be quashed and set aside being illegal, arbitrary, unconstitutional and against the legal rights of the petitioner.

b. That the respondents may kindly be directed to repay the amount of

Rs.735,465/- to the petitioner along with interest @ 18% per annum from the date of recovery till the same is realized.

c. That the respondents may kindly be directed to fix the pension of he petitioner only after giving the opportunity of being heard to the petitioner."

2. Precisely, the facts of the case, as emerge from the record, are

that the petitioner retired as an Additional Assistant Engineer from the

respondent Board on 30.9.2006 and vide Pension Payment Order

(PPO) No. 9268, Annexure P-2, his pension came to be fixed at

Rs.17,605/- per month. On the basis of PPO issued in favour of the

petitioner, respondent Board authorized respondent Bank to pay

aforesaid amount regularly in favour of petitioner on account of

pension. After, seventeen years of issuance of aforesaid PPO in

favour of the petitioner, respondent Board realized that the pension

was being paid in excess to extent of Rs.1960/- per month to the

petitioner and as such, vide communication dated 14.12.2022, that too

without affording opportunity of hearing to the petitioner, called upon

respondent Bank to recover Rs.7,35,465/- from the bank account of the

petitioner. Respondent Bank acting upon the instructions of the

respondent Board also did not bother to inform the petitioner before

effecting recovery, as a result thereof, Rs.7,35,465/- came to be

recovered from the bank account of the petitioner in one go. Petitioner,

who is 74 years of age, has been suddenly given the shock of his life

by the respondent Board by effecting recovery of huge amount that too

in one go.

.

3. Pursuant to notices issued in the instant proceedings,

respondents have filed reply. Respondent Board in its reply, has stated

that erroneously, at the time of retirement, basic pension of petitioner

was fixed at Rs.17,605/- whereas it ought to have been 15,645/- as a

result of which, petitioner kept on receiving the sum of Rs.1960/- per

month in excess. It has been further stated in the reply that the

petitioner had given an undertaking on 7.9.2006 that he will refund the

amount on account of over payment/excess payment from his gratuity,

which may be noticed later on (Annexure R-1), as such, no illegality

can be said to be have been committed by the respondents, while

ordering deduction of the amount without, affording opportunity of

hearing to the petitioner

4. Respondent Bank in its reply has stated that Rs.7,35,465/- was

deducted on the instructions of the respondent Board, which had

authorized pension, in favour of the petitioner and there was no

occasion for it to afford opportunity of hearing to the petitioner.

5. Precisely, the grouse of the petitioner as has been highlighted in

the petition and further canvassed by Ms. Shikha Chauhan, learned

counsel for the petitioner is that recovery, if any, on account of alleged

excess payment could not have been effected by the respondent

Board, after a period of seventeen years that too without affording

opportunity of hearing to the petitioner. Ms. Chauhan, submitted that

factum with regard to recovery came to the notice of petitioner after a

huge amount of Rs.7,35,465/- was deducted from his account. She

submitted that there is nothing on record to suggest that said amount

was received by petitioner on account of mis-representation on his

.

part, rather the respondent Board itself fixed the pension and there

was no occasion for the petitioner to know that his pension has been

wrongly fixed and he is in receipt of excess amount. Learned counsel

for the petitioner, while fairly admitting the fact that being a Class II

officer, petitioner is not entitled to the blanket protection as has been

granted to the Class III and IV employees by Hon'ble Apex Court in

r to State of Punjab and others v. Rafiq Masih, (2015) 4 SCC 334,

contended that even in the aforesaid case, Hon'ble Apex Court

categorically held that recovery on the basis of undertaking of

employees is not permissible, if the same appears to be harsh or

arbitrary to such an extent it would far outweigh, the equitable balance

of the employer's right to recover.

6. Learned counsel for the petitioner submitted that since only

Rs.1960/- per month was being paid in excess, it never came to his

notice that he is in receipt of excess payment and as such, it cannot be

said that the petitioner, despite having noticed alleged excess

payment, kept on receiving the same with the intention to cheat and

defraud the employer, rather, factum with regard to receipt of excess

payment came to notice of the petitioner after such amount was

deducted from his account, in lump sum. Lastly, learned counsel for the

petitioner argued that otherwise also, respondent ought to have

afforded opportunity of hearing to the petitioner before recovering

amount from the petitioner, as such, recovery based upon order

passed without adhering to principles of natural justice, deserves to be

quashed and set aside. In support of her aforesaid submissions,

learned counsel for the petitioner placed judgment Division Bench in

.

CWPOA No. 3145 of 2019, titled S.S. Chaudhary v. State of H.P. &

Others, decided on 24.3.2022.

7. While refuting aforesaid submissions made by learned counsel

for the petitioner, Mr. Raj Pal Singh Thakur, Advocate, appearing for

the respondent-Board, vehemently argued that once the petitioner had

given an undertaking to the effect that in the event of detection of

overpayment, such amount can be recovered by the respondent from

his gratuity/ leave encashment, no illegality can be said to have been

committed by the respondents, while ordering recovery from the

petitioner, without issuing any notice to the petitioner, who otherwise,

was fully aware of the fact that he is in receipt of excess payment , yet

took no steps to inform the respondent Board. Mr. Thakur further

submitted that there is clear cut mis-representation on the part of the

petitioner, because it cannot be accepted that the factum of receipt of

excess payment was not in the knowledge of the petitioner, who has

retired as Class II officer. Mr. Thakur further argued that the judgment

pressed into service in Rafiq Masih supra, is not applicable to the

present case, especially when it is not in dispute that the petitioner has

retired from a Class II post, whereas, in Rafiq Masih supra, Hon'ble

Apex Court had an occasion to deal with employees of Class III and IV

cadre.

8. Mr. Sunil Mohan Goel, Advocate appearing for the respondent

Bank submitted that the Bank has only acted as per instructions of

employer, at whose askance, amount was being released into bank

account of petitioner every month. Since the employer asked to deduct

the amount from the petitioner, respondent Bank had no option but to

.

deduct the amount in question, as such, there was no occasion for the

bank to afford opportunity of hearing to the petitioner, who otherwise,

being Class II officer, was getting money on the strength of

authorization issued by the board, which actually stood revised with

issuance communication dated 14.12.2022 (Annexure P-1).

9. Having heard learned counsel for the parties and perused the

material available on record, this court finds that it is not in dispute that

the petitioner retired as an Additional Assistant Engineer i.e. Class II

officer and as such, he cannot straightway claim benefit of judgment in

Rafiq Masih supra, passed by Hon'ble Apex Court, wherein admittedly

it has been ruled that no recovery on account of excess payment, shall

be effected from Class III and Class IV (Group C and D) employees,

after their superannuation, however, if the judgment passed in Rafiq

Masih is read in its entirety, it specifically deals with a situation, where

employer intended or effected recovery on the basis of undertaking

given by the employee, prior to his retirement. While dealing with the

aforesaid situation, Hon'ble Apex Court categorically held that the

recovery on the basis of undertaking essentially has to be confined to

Class I/Group-A and Class-II/Group-B, but even then, the Court may

be required to see whether the recovery would be iniquitous, harsh or

arbitrary to such an extent, as would far overweigh the equitable

balance of the employer's right to recover.

10. No doubt in the case at hand, petitioner is a retired Class II

officer and before retirement, he had given an undertaking that in the

event of detection of any excess payment, Board shall be entitled to

.

recover the amount but this court cannot lose sight of the fact that the

recovery on account of excess payment came to be recovered after

seventeen years of retirement of the petitioner that too, without

affording opportunity of hearing to him.

11. This court also cannot lose sight of the fact that the petitioner

being a retired employee, is wholly dependent upon his pension and as

such, great prejudice shall be caused to him/her in case, aforesaid

amount accumulated in his bank account is ordered to be recovered in

one go. Admittedly. in the case at hand, respondent Board itself initially

authorized pension in favour of the petitioner to the tune of Rs.17,605/-

and thereafter same was being remitted in the bank account of

petitioner regularly, petitioner cannot be expected to know that he is in

receipt of excess amount, especially when amount is not so big.

12. In the case at hand, petitioner was getting Rs.1960/- per month

in excess of his entitlement. Since, the amount of pension kept on

increasing due to pay revision and enhancement of DA etc., there

appears to be merit in the contention of learned counsel for the

petitioner that the petitioner remained under the impression that his

pension stands enhanced on account of various enhancements

ordered by the Government from time to time.

13. Leaving everything aside, this court is of definite view that once

factum with regard to excess payment had come to the notice of

respondent Board, before recovering the same, it ought to have

afforded opportunity of hearing to the petitioner to explain why the

payment allegedly made in excess be not deducted from his account.

14. Had the board afforded opportunity of hearing to the petitioner,

.

he, apart from rendering plausible explanation for the same, could have

also made a request for recovery in installments to avoid hardships but

in the case at hand, respondent Board, without bothering to afford

opportunity of hearing to the petitioner, straightway called upon the

respondent Bank to deduct huge sum of Rs.7,35,465/-. There is

nothing on record to suggest that amount sought to be recovered was

15.

r to received by petitioner due to mis-representation on his part, rather on

account of PPO issued by the board.

No doubt, petitioner gave an undertaking on 7.9.2006 (Annexure

R-1) to refund amount of recovery, but that could be done within

reasonable time and certainly not after seventeen years of retirement.

16. At this stage, it would be apt to take note of following

paragraphs of Rafiq Masih supra,

"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

herein above, we may, as a ready reference, summarise the following few situations, wherein recoveries by the employers, would be 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 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."

17. As has been observed herein above, Hon'ble Apex Court in

Rafiq Masih supra has held recovery to be impermissible from Class-III

and Class-IV service (or Group 'C' and Group 'D' service), retired

employees, or employees who are due to retire within one year, of the

order of recovery and recovery from employees. In the aforesaid

judgment, Hon'ble Apex Court has held that when the excess payment

has been made for a period in excess of five years, before the order of

recovery is issued, it cannot be recovered In terms of afore judgment

in Rafiq Masih supra, respondent Board is estopped from making

recovery only from Class III and Class IV employees, rather recovery

from Class I and II employees (retired) can also be prohibited in terms

of aforesaid judgment, if the same is sought to be recovered after five

years or the court arrives at a conclusion that the recovery, if allowed,

would be harsh or arbitrary.

18. Leaving everything aside, Hon'ble Apex Court in the judgment

supra has specifically used the phrase "in any other case" meaning

thereby that apart from employees belonging to Classes III and IV,

court can restrain recovery from Class I and II officers, if it comes to

the conclusion that the recovery, if permitted 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.

19. Recently Division Bench of this Court in case CWPOA No. 3145

.

of 2019, titled S.S. Chaudhary v. State of H.P. & Others, decided on

24.3.2022, having taken note of various judgments rendered from time

to time, including Rafiq Masih, laid down certain parameters, whereby

recovery by an employer would be impermissible from the employees,

relevant paragraph, whereof is reproduced herein below:

"35. In view of the aforesaid discussion, as held by Hon'ble Supreme

Court in Rafiq Masih's case (supra), it is not possible to postulate all situations of hardship, where payments have mistakenly been made by the employer, yet in the following situations, recovery by the

employer would be 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 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.

(vi) Recovery on the basis of undertaking from the employees essentially has to be confined to Class I/Group-A and Class-

II/Group-B, but even then, the Court may be required to see whether the recovery would be iniquitous, harsh or arbitrary to such an extent, as would far overweigh the equitable balance of the employer's right to recover.

(vii) Recovery from the employees belonging to Class-III and Class-IV even on the basis of undertaking is impermissible.

(viii) The aforesaid categories of cases are by way of illustration and it may not be possible to lay down any precise, clearly defined, sufficiently channelised and inflexible gudielines or rigid formula and to give any exhaustive list of myriad kinds of cases. Therefore, each of such cases would be required to be decided on its own merit."

20. In the case at hand, court is fully convinced that the recovery, if

permitted, would cause great hardship to the petitioner, from whose

account, considerable amount, that too, without any fault of him has

.

been recovered in one go. Petitioner, being a retiree is wholly

dependent upon the amount of pension, which he may have saved in

his bank account and in case, same is permitted to be taken away by

the respondent Board in one go, that would not only hit the petitioner

but entire family which may be dependent upon him.

21. It is strange to note that the respondent Board failed to notice

factum with regard to alleged excess payment for seventeen years, but

definitely for such fault of the respondent Board, petitioner cannot be

made to suffer, that too at the fag end of his life.

22. No doubt, only Rs.1960/- was being paid in excess every month

but now entire amount, allegedly paid in excess, which has

accumulated to a considerable sum of Rs.7,35,465/ has been

recovered in one go, which if not reversed, would put entire family of

the petitioner in difficulty.

23. Reliance placed by learned counsel for the respondent Board on

the judgment passed by this Court in Mulakh Raj v. H.P.S.E.B. Ltd. &

Others, CWP No. 8879 of 2022, decided on 25.5.2023, is wholly

misconceived because, facts of Mulakh Raj supra are totally different

and cannot be equated to the facts of the case of the petitioner. In

Mulakh Raj supra, petitioner had received more than Rs.12.00 Lakh in

excess and employer, after having noticed aforesaid factum of excess

payment, started recovery within five years of retirement of petitioner in

that case. Moreover, in that case, petitioner himself had agreed to pay

the amount, allegedly received by him in excess but in installments

and employer, after having accepted request of petitioner therein

permitted him to deposit the amount to be deposited in installment.

.

24. In the instant case, neither any notice was ever issued to the

petitioner before effecting recovery nor option, if any, was ever given to

him for payment in installments and order of recovery was issued after

inordinate delay of seventeen years, which action of the respondent

Board has been deprecated by Division Bench in S.S. Chaudhary in

para 35(3), wherein it has been held that the recovery from employees,

25.

r to when the excess payment has been made for a period in excess of five

years, before the order of recovery is issued, is impermissible.

Consequently in view of above, I find sufficient merit in the

petition, which is accordingly allowed. Order dated 14.12.2022

(Annexure P-1) is quashed and set aside. Respondent Bank is directed

to deduct amount of Rs.7,35,465/- from the account of respondent

Board and remit the same into bank account of the petitioner, within

two weeks, failing which the petitioner shall be entitled to interest on

such amount at the rate of 6% per annum, from the date of deduction

to the date of actual remittance in the account of petitioner.

The petition stands disposed of alongwith all pending

applications.

(Sandeep Sharma) Judge October 9, 2023 Vikrant