Kerala High Court

Kerala Transport Development Finance ... vs Nirmaladevi P on 4 August, 2025

WA No.1162/2018
                                   1

                                                      2025:KER:57232
               IN THE HIGH COURT OF KERALA AT ERNAKULAM

                                PRESENT

        THE HONOURABLE MR.JUSTICE SUSHRUT ARVIND DHARMADHIKARI

                                   &

              THE HONOURABLE MR. JUSTICE SYAM KUMAR V.M.

        MONDAY, THE 4TH DAY OF AUGUST 2025 / 13TH SRAVANA, 1947

                          WA NO. 1162 OF 2018

        AGAINST THE ORDER/JUDGMENT DATED 02.02.0207 IN WPC NO.21521

OF 2011 OF HIGH COURT OF KERALA

APPELLANT:
             KERALA TRANSPORT DEVELOPMENT FINANCE CORPORATION
             LIMITED
             REPRESENTED BY ITS MANAGING DIRECTOR, REGISTERED
             OFFICE: 6TH FLOOR, TRANS TOWER, VAZHUTHACAUD,
             THIRUVANANTHAPURAM, PIN -695 014.


             BY ADVS.
             SHRI.T.P.SAJAN, SC, KTDFC
             SHRI.DEEPU THANKAN, SC, KERALA TRANSPORT DEVELOPMENT
             FINANCE CORPORATION LIMITED - KTDFC


RESPONDENTS:
     1     NIRMALADEVI P
           W/O. LATE VIJAYAKUMAR, MATHRUSSERI HOUSE, VATTAPPARA
           P.O., THIRUVANANTHAPURAM DISTRICT, RETIRED CHIEF
           MANAGER, KERALA TRANSPORT DEVELOPMENT FINANCE
           CORPORATION LIMITED.

    2        THE ACCOUNTANT GENERAL KERALA
             OFFICE OF THE ACCOUNTANT GENERAL, THIRUVANANTHAPURAM,
             PIN -695 014.



THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 29.05.2025, THE
COURT ON 04.08.2025 DELIVERED THE FOLLOWING:
 WA No.1162/2018
                                     2

                                                           2025:KER:57232
                                JUDGMENT

Sushrut Arvind Dharmadhikari, J.

This appeal has been filed with a delay of 406 days. Having

perused the reasons stated in the affidavit filed in support of the

application to condone delay, we are satisfied that sufficient cause has

been made out to condone the delay. Hence, C.M.Appl. No.1/2018 to

condone the delay is allowed.

2. The present intra-court appeal filed under Section 5

of the Kerala High Court Act, 1958 assails the judgment dated

02.02.2017 passed in WP(C) No.21521/2011 (M), whereby the Writ

Petition filed by the 2nd respondent herein has been allowed.

3. The appellant is the 1 st respondent in the Writ Petition

whereas the 1st respondent is the petitioner and the 2 nd respondent is

the 2ND respondent in the Writ Petition.

4. The brief facts of the case are that the 1 st respondent

was originally an employee of the Kerala State Road Transport

Corporation. At the time of constitution of the Kerala Transport

Development Finance Corporation (KTDFC) who is the appellant

herein, many of the employees of the KSRTC were sent on deputation

to the appellant Corporation. As per the proceedings of the KSRTC

dated 28.11.1997, the 1st respondent was sent on deputation as

Special Assistant Chief Officer in the appellant Corporation. The 1 st

respondent continued on deputation upto 2003. Vide G.O. dated

2025:KER:57232 st 19.09.2003, the 1 respondent and the other 3 employees who were

on deputation with the appellant, were absorbed permanently to the

appellant corporation, with the condition that the salary would be

fixed after deducting the pension amount from the last salary drawn

before absorption. As per the said G.O., those Government servants

who have been permitted to be absorbed in the public sector

undertaking shall be deemed to have retired from Government service

from the date of such absorption and the pay will be fixed deducting

the pension amount payable. It is on this basis, that the fixation of pay

deducting the pension amount was made from the KSRTC as per

Ext.P2.

5. Subsequently, on 02.06.1986, G.O. was issued

wherein government had notified the condition as follows:

"Those who retire voluntarily ahead of the date of superannuation and who are absorbed in quasi-government institutions will be allowed to receive the full salary under the institution but, their pensionary benefits from the government will be kept in abeyance until end of their service in the institution."

6. The appellant without noticing G.O. dated

02.06.1986, instead of fixing the pay in the new pension scale,

pension was deducted from the basic pay last drawn in the KSRTC.

This continued from 20.10.2003 onwards. On 25.11.2008, the audit

party of the 2nd respondent raised objection regarding wrong fixation

of pay and the alleged consequent excess payment of salary to the 1 st

respondent. While fixing the initial pay after absorption of the 1 st

2025:KER:57232 respondent in the appellant corporation, there has been defect in

fixation of the basic pay, as a result of which an excess payment of

Rs.1,87,652/- was made to the 1 st respondent. On the aforesaid basis,

a notice, Ext.P7 was issued to the 1st respondent directing refund of

the aforesaid amount. Being aggrieved, the 1 st respondent has

challenged the recovery order in the Writ Petition. The writ petition

came to be finally decided vide order dated 02.02.2017, whereby the

learned Single Judge allowed the same quashing the impugned

recovery order.

7. Learned counsel for the appellant contended that the

finding of the learned Single Judge relying on the judgment passed by

the Hon'ble Apex Court in the case of State of Punjab & Others v.

Rafiq Masih (White Washer) [(2015) 4 SCC 334] would not be

maintainable against the employees who had already retired from

service and is erroneous. In the instant case, the 1 st respondent retired

from the service of the appellant as Chief Manager. Therefore, she

was not a group 'c' or group 'd' employee. The 1 st respondent was

serving as Chief Manager, Finance, therefore, a person who was in the

helm of affairs of the appellant Corporation is fully aware of the pay

fixation of the staff of the Corporation. As such, the 1 st respondent is

the responsible officer for fixation of pay in accordance with the terms

and conditions of appointment of its employees. The 1 st respondent

cannot challenge the proceedings. The learned Single Judge ought to

2025:KER:57232 have considered the fact that the excess salary was not paid by

mistake by the KTDFC, but as a conditional payment, considering the

difficulties being faced, because of non-receipt of pension from KSRTC,

with a specific condition that such excess payment shall be refunded

as and when the 1st respondent begins to receive pension from KSRTC.

The 1st respondent was well within the knowledge but did not inform

KTDFC upon receipt of the pension from KSRTC, thereby causing

continuous receipt of excess salary (full salary) till retirement. This

amounts to breach of contract and Rafiq Masih's (supra) would not

be applicable to the facts and circumstances of this case. The order

passed by the learned Single Judge deserves to be set aside.

8. Eventhough service has not been completed on

respondent no.1, no prejudice will be caused to her by the judgment

which we intend to pass.

9. No one appears for the respondents. Heard the

learned counsel for the appellant.

10. The Hon'ble Apex Court in the case of State of Punjab

and others vs. Rafiq Masih (White Washter) reported in 2015 (4) SCC

334 has held as under:

"It is not possible to postulate all situations of hardships where payments have mistakenly been made by an employer, in the following situations, a 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

2025:KER:57232 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."

11. Learned counsel for the appellant submitted that

none of the conditions laid down in Rafiq Masih's case (supra) are

applicable to the facts and circumstances of this case since the 1 st

respondent being the Chief Manager (Finance) was well aware of the

fact that she is drawing a full salary and as such she also did not

inform when she received the pension from KSRTC. In such a situation,

the learned Single Judge ought to have dismissed the Writ Petition.

12. On perusal of the clauses mentioned in Rafiq

Masih's case (supra), Clause (ii) states that recovery from retired

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

order of recovery would be applicable in the case of the 1 st

respondent.