Telangana High Court

P. Dhanraj vs 1 Telangana on 24 November, 2023

       THE HONOURABLE SRI JUSTICE PULLA KARTHIK

               WRIT PETITION No.29119 OF 2013

ORDER:

This Writ Petition is filed seeking to declare the proceedings in

Lr.Rc.No.151/A1/2012, dated 17.06.2013, issued by the 2nd

respondent, as illegal, contrary to law and without jurisdiction and

quash the same, and consequently, sought direction to the respondents

to pay-back the recovered amount to a tune of Rs.85,593/- along with

interest @ 12% p.a., and all other consequential benefits of Gratuity, by

fixing the P.F. in the cadre of Manager (Finance) in the respondent-

Corporation.

2. The case of the petitioner is that he was directly recruited as

Typist in the respondent-Corporation on 15.06.1981. Thereafter, since

there was no channel for promotion, his post was converted to Junior

Assistant on 16.10.1984. Subsequently, he was promoted as Senior

Assistant on 01.12.1984 and further promoted as Superintendent on

11.08.1997. It is the further case of the petitioner that while he was

working in the respondent-Corporation, he has pursued his higher

education and obtained Degree qualification in Bachelor of Arts in the

year 2005. Since his case was not considered for promotion to the post

of Assistant Accounts Officer (AAO), he filed W.P.No.2382 of 2009 before

this Court, and this Court has passed interim order in W.P.M.P.No.3035

of 2009, dated 18.02.2009, directing the respondents to consider the

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case of the petitioner for promotion to the post of Assistant Accounts

Officer. Pursuant to the same, the respondents have considered and

rejected his case vide order, dated 08.06.2009, on the ground that he

did not pass the Accounts Test and HDc/JDc Test. Questioning the

rejection order, dated 08.06.2009, the petitioner has filed another

W.P.No.12166 of 2009, which was allowed by this Court vide Order,

dated 30.03.2010, holding that he had passed the C.C.I. Test, which is

equivalent to the HDc/JDc Test and directed the respondents to

consider his case for promotion to the post of Assistant Accounts

Officer. In compliance of the said order, the petitioner was promoted to

the post of Assistant Accounts Officer vide proceedings, dated

30.04.2010. However, his promotion was not effected from 08.04.2008

when the vacancy arose to the post of Assistant Accounts Officer.

3. It is the further case of the petitioner that while the vacancy for

the post of Assistant Accounts Officer arose, vacancy for the post of

Manager (Finance) also arose and as the petitioner was denied for

promotion to the post of Manager (Finance), he filed W.P.No.12559 of

2011, which was allowed vide order, dated 02.11.2011, holding that the

order of respondent-Corporation, dated 11.02.2010, insofar as

appointing one Mr.G. Raghu Ramaiah as Manager (Finance) instead of

petitioner is bad and set aside the same, and further directed the

respondents to promote the petitioner to the post of Manager (Finance)

without treating him as disqualified on the ground that he did not pass

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the Accounts Test. In spite of the order of this Court, dated

02.11.2011, the petitioner was not promoted as Manager (Finance). As

such, he was constrained to file contempt case vide C.C.No.131 of 2012.

While so, the respondent-Corporation filed W.A.No.267 of 2012,

challenging the order of this Court in W.P.No.12559 of 2011, dated

02.11.2011, and an interim order, dated 17.07.2012, was granted

making it clear that promotion, if any, given to the petitioner, shall be

subject to result to the writ appeal. In pursuance of the same, Board of

Directors of the respondent-Corporation promoted the petitioner to the

post of Manager (Finance) on 17.08.2012 vide proceedings in

R.C.No.2694/A/2011. Hence, the contempt case filed by the petitioner

was closed. Subsequently, he has retired from service on 26.02.2013.

While the petitioner was in service, a charge sheet, dated 30.03.2012,

was issued to him, for which, he has submitted his explanation on

10.04.2012, denying all the charges. However, having not been

convinced with the same, an enquiry was conducted and the impugned

punishment order, dated 17.06.2013, was issued by the respondents.

Hence, the present writ petition.

4. Heard Sri W.B. Srinivas, learned Senior Counsel, representing

Sri K. Ramalingeswara Sarma, learned counsel appearing for the

petitioner, and Sri Md. Yousuf, learned Standing Counsel for Telangana

Backward Classes Cooperative Finance Corporation Limited, appearing

for the respondents.

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5. It has been contended by the learned Senior Counsel appearing

for the petitioner that the 2nd respondent is not the competent authority

to initiate any disciplinary proceedings and to impose the punishment

against the petitioner, since the petitioner was appointed and promoted

by the Board of Directors of the respondent-Corporation, which is the

competent authority to deal with the disciplinary proceedings. As such,

the entire disciplinary proceedings are vitiated right from the inception

and the enquiry findings are based on presumptions and without any

material. Hence, the impugned proceedings are wholly without

jurisdiction since the competent authority i.e., the Board of Directors,

did not pass any orders of reversion or initiated any disciplinary

proceedings. Therefore, the 2nd respondent has no authority of law to

treat the petitioner as Superintendent w.e.f.30.04.2010 and order for

recovery of an amount of Rs.85,593/-.

6. It is further contended that the Enquiry Officer and the Authority,

that imposed the punishment, have travelled beyond the scope of the

enquiry, and therefore, the enquiry is vitiated and the charges speak

only about non-obtaining of leave, whereas, the Enquiry Officer and the

Punishing Authority have dwelled deep into matters which are not the

subject matter of the charge sheet, and therefore, they have enlarged

the scope of enquiry, which is not permissible under law. It is further

contended that when there was no charge with respect to the

genuineness or otherwise of the degree certificate, the findings recorded

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by the Enquiry Officer, which were affirmed by the Authority, are

unsustainable under law. Further, the impugned proceedings clearly

show that the findings are unconcerned with the charges framed and

the Authority which has passed the impugned proceedings, is not

competent to revert the petitioner and order for recovery that too after

the petitioner has retired from service. It is further contended that the

impugned proceedings were issued only to take wreck vengeance since

the petitioner has approached this Court for justice by way of filing

W.P.Nos.2382 of 2009, 12166 of 2009 and 12559 of 2013, and

C.C.No.131 of 2012.

7. It is further contended that the 2nd respondent took the very same

stand in C.C.No.131 of 2012 as well as in W.A.No.267 of 2012, which

was not accepted by this Court and only after the petitioner was

promoted, the contempt case was closed. Hence, the 2nd respondent

cannot initiate any disciplinary proceedings nor continue the

proceedings after having promoted the petitioner and cannot pass the

impugned order, reopening the very same stand. Further, it is an

admitted fact that the promotions of the petitioner were effected only as

per the directions of this Court and not based on the Degree Certificates

as is being projected in the impugned order. It is further contended

that the 2nd respondent never found fault with the graduation certificate

of the petitioner and on the contrary, agreed that the petitioner

possessed all the qualifications and therefore, the initiation of the

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disciplinary proceedings is unsustainable and the same are initiated

only to harass the petitioner. Hence, the action of the 2nd respondent is

wholly mala fide and not bona fide, as evident from the facts of the case.

Further, the impugned orders are unsustainable since there was never

any charge against the petitioner that he sought or obtained promotion

based on the fake degree certificate. When there is no such charge

against the petitioner, the impugned order, holding that the certificates

are fake, is without any material basis, without evidence and beyond

the scope of the enquiry and charge sheet. It is further contended that

the requirement of graduation for promotion was introduced only in the

year 2003, prior to which, the petitioner was already promoted in the

feeder channel, the same cannot be insisted for promotion posts, since

the same would not apply to his case as the requirement was not there

previously, prior to 2003. Hence, learned counsel prayed to allow the

present writ petition, setting aside the impugned order, dated

17.06.2013.

8. Per contra, learned Standing Counsel appearing for the

respondents contended that an application, dated 25.02.2012, under

the Right to Information Act, 2005, was received from one Sri

D.Subramanian, seeking information about the educational

qualification (Degree Particulars) and University details of the petitioner,

at the time of promotion as Assistant Accounts Officer, wherein it was

disclosed that while the petitioner was working as Superintendent, he

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had pursued 1st, 2nd and 3rd year Bachelor of Arts Degree in different

Universities and the same was not informed by him to the concerned

Authorities. Hence, a charge sheet was issued to the petitioner on

14.03.2012, for which, he has submitted an explanation, and not being

satisfied with the same, and the 2nd respondent has initiated

disciplinary proceedings against the petitioner vide proceedings

Rc.No.151/A1/2012, dated 30.03.2012. Basing on the Enquiry Report,

the respondents have imposed a punishment of recovery of Rs.85,593/-

vide proceedings R.C.No.151/ A1/2012, dated 17.06.2013.

9. It is further contended that in view of the serious irregularities

committed by the petitioner, the respondents are justified in proposing

and recovering an amount of Rs.85,593/- from the petitioner towards

the excess payment released towards salary on account of irregular

promotion from the cadre of Superintendent to Assistant Accounts

Officer and Manager (Finance). It is further contended that the enquiry

was conducted in a fair and transparent manner, by providing all

reasonable opportunities to the petitioner to defend his case. Further,

as per the the Common Service Bye-laws of the Corporation, the 2nd

respondent is the competent authority to take disciplinary action

against the petitioner as per Hence, learned Standing Counsel prayed to

dismiss the present writ petition.

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10. This Court has taken note of the rival submissions made by the

respective parties.

11. A perusal of the record discloses that a charge sheet was issued

to the petitioner on 30.03.2012, by framing the following charges:

"Article-I:- That the said Sri P.Dhan Raj, Assistant Accounts Officer while working as Superintendent/Assistant Executive Officer, DBCSCS Ltd., Hyderabad has acquired B.A Degree certificate through Distance Education Mode while in service and he has not obtained any kind of permission from the competent for studying his B.A. Degree of 3 years i.e. 2003, 2004 and 2005 in different Universities, thus he acted in a manner unbecoming of the Government servant and shown absolute lack of devotion to duties and thus violated Rule 3(2) and Rule 3(5) of A.P. Civil Services (Conduct) Rules, 1964.

Article-II:- That the said Sri P.Dhan Raj, Assistant Accounts Officer while working as Superintendent/Assistant Executive Officer, DBCSCS Ltd., Hyderabad has acquired B.A Degree certificate of 3 years course while in service and he has totally hide out though doing BA Degree through Distance Education Mode and the Head of the Department was not even intimated, till he produced the certificate of three years Degree Course, thus he acted in a manner unbecoming of the Government servant and shown absolute lack of devotion to duties and thus violated Rule 3(2) and Rule 3(5) of A.P. Civil Services (Conduct) Rules, 1964.

Article-III:- That the said Sri P.Dhan Raj, Assistant Accounts Officer while working as Superintendent/Assistant Executive Officer, DBCSCS Ltd., Hyderabad did appear 1st, 2nd and 3rd year B.A Degree in different Universities through Distance Education Mode and as per the 3rd year statement of Marks, he has appeared the 3rd year course in the month of August 2005 and as per the Attendance Register obtained from the office of the District B.C. Service Coop. Society Ltd., Hyderabad, the said individual had not availed any kind of leave for attending the examinations during the months from May

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2005 to August 2005, except 6th, 7th and 8th of June, 2005. The record reveals that he had not appeared the examinations of the B.A. Degree Course on the said dates, thus he acted in a manner unbecoming of the Government servant and shown absolute lack of devotion to duties and thus violated Rule 3(2) and Rule 3(5) of A.P. Civil Services (Conduct) Rules, 1964."

For the aforementioned charges, the petitioner has submitted his

explanation stating that he has obtained oral permission from the

Officers concerned to appear for the graduation examination.

12. The record further discloses that the initial post of the petitioner

was converted to the post of Junior Assistant on 16.10.1984.

Thereafter, he was promoted as Senior Assistant on 01.12.1984 and as

Superintendent on 11.08.1997. Admittedly, for all these cadres, the

qualification of Degree was not prescribed prior to the year 2003, and

the Rules were amended only on 10.03.2008 vide proceedings

Rc.No.E1/ 8125/2007, by prescribing the qualification of Degree for the

post of Manager (Finance). The record further discloses that the

petitioner has completed his Graduation in Bachelor of Arts in the year

2005, and as per the Special Bye-laws of the Corporation, in

proceedings Rc.No.2961/88J/ 11, dated 17.03.1989, qualification of

Degree was prescribed for the posts of Junior Assistant, Senior

Assistant and Superintendent.

13. Admittedly, the respondents have promoted the petitioner on as

Assistant Accounts Officer on 30.04.2010, in compliance of the order of

this Court in W.P.No.12166 of 2009, dated 30.03.2010. Thereafter, he

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was further promoted as Manager (Finance)/Accounts Officer on

17.08.2012, and retired from service on 28.02.2013.

14. Admittedly, the petitioner has approached this Court on various

occasions seeking promotion to the post of Assistant Accounts Officer

and Manager (Finance). The record discloses that, only after filing the

Contempt Case, the respondents have promoted the petitioner as

Assistant Accounts Officer in the year 2010 and now, after a lapse of 7

years, initiation of disciplinary proceedings, basing on the complaint of

a third party i.e. Ms. Subramanian, seems to be with a mala fide

intention to harass the petitioner.

15. Coming to the judgments relied on by the petitioner, in Union of

India v. B.V.Gopinath 1, the Hon'ble Apex Court held as follows:

"36. It was also submitted that the charge memo drawn by an officer other than the specified authority was wholly without jurisdiction and hence, vitiated the whole disciplinary enquiry. Reliance was placed on Government of Andhra Pradesh Vs. M.A. Majeed & Anr., (2006) 1 ALD 823: (2006) 1 ALT 661. It was also submitted that where a statutory authority is required do something in a particular manner, the same must be done in that manner only. The State and other authorities, while acting under the statue, are the creatures of the statute and they must act with in the four corners of the statue. Learned counsel relied on Bhavnagar University Vs. Palitana Sugar Mill (P) Ltd. & Ors., (2003) 2 SCC 111.

39. Article 311(1) of the Constitution of India ensures that no person who is a member of a civil service of the Union or an all India

2014 1 SCC 351

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service can be dismissed or removed by an authority subordinate to that by which he was appointed. The overwhelming importance and value of Article 311(1) for the civil administration as well as the public servant has been considered stated and re- stated, by this Court in numerous judgments, since the Constitution came into effect on 19th January, 1950. Article 311(2) ensures that no civil servant is dismissed or reduced in rank except after an inquiry held in accordance with the rules of natural justice. To effectuate the guarantee contained in Article 311(1) and to ensure compliance with the mandatory requirements of Article 311(2), the Government of India has promulgated CCS (CCA) Rules, 1965.

...

49. Although number of collateral issues had been raised by the learned counsel for the appellants as well the respondents, we deem it appropriate not to opine on the same in view of the conclusion that the charge sheet/charge memo having not been approved by the disciplinary authority was non est in the eye of law."

16. In E. Subrahmanyam v. Vishakapatnam Port Trust &

another 2, this Court has made the following observation:

"It is a fundamental ingredient of the principles of natural justice that, no person shall be condemned without affording him an opportunity of hearing. As a part of adherence and compliance with this concept, a detailed procedure is followed before an employee is penalized. He is first informed, in very precise terms, the charge laid against him. If the explanation offered is not found satisfactory, then an enquiry is ordered to be conducted in his presence. The very purpose of this elaborate procedure evolved is to convey clearly the misconduct committed by the employee. The charge-sheet, in the instant case, has proceeded on the premise that Smt. E. Sanyasamma, due to her illness is not fit for Special Voluntary Retirement Scheme benefit and hence the failure of the writ petitioner to bring out her fragile health condition in his vigilance report amounted to misconduct. The Disciplinary Authority ultimately had agreed with

2013 6 ALD 428

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the view point canvassed by the petitioner that there is no bar even for a sick person to seek voluntary retirement and therefore the failure to bring out the health condition of the applicant has paled itself into insignificance. The charge-sheet never made any issue of the failure of the petitioner to make out cost-benefit analysis of the case. Therefore, while at the same time holding the petitioner not guilty of the main limb of the charge, he is now found fault for his failure to bring out the cost-benefit analysis in his vigilance report. He was never called upon to enter his defense in that respect. To this extent, therefore, the petitioner is condemned and found guilty of any allegation which never formed part of the charge-sheet. In other words, the petitioner is condemned behind his back and unheard too. The impugned order of punishment is clearly in violation of the principles of natural justice."

17. In Girijan Co-operative Corporation Limited, Andhra Pradesh

v. K.Satyanarayana Rao 3, the Hon'ble Apex Court held as follows:

"14. There cannot be any doubt or dispute that an employer can initiate a departmental proceedings and/or continue the same only in terms of the rules framed by it. It is also a well settled law that the disciplinary proceedings are initiated only when a charge-sheet is issued. See: Union of India v. K.V. Jankiraman (sic) (1993) 23 ATC

322.

15. This Court in UCO Bank & Anr. V. Rajinder Lal Capoor, 2007 (6) SCC 694, has held as under:

"21. The aforementioned Regulation, however, could be invoked only when the disciplinary proceedings had clearly been initiated prior to the respondent's ceasing to be in service. The terminologies used therein are of seminal importance. Only when a disciplinary proceeding has been initiated against the officer of the bank despite his attaining the age of superannuation, can the disciplinary proceeding be allowed on the basis of the legal fiction created thereunder i.e. continue 'as if he was in service'. Thus, only when a valid departmental

2010 15 SCC 322

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proceeding is initiated by reason of the legal fiction raised in terms of the said provision, the delinquent officer would be deemed to be in service although he has reached his age of superannuation. The departmental proceedings, it is trite law, is not initiated merely by issuance of a show-cause notice. It is initiated only when a charge-sheet is issued (See Union of India v. K.V. Jankiraman, (1993) 23 ATC 322. This aspect of the matter has also been considered by this Court recently in Gopal India Ltd. V. Saroj Kumar Mishra, 2007(9) SCC 625, wherein it was held that date of application of mind on the allegations leveled against an officer by the competent authority as a result whereof a charge-sheet is issued would be the date of which the disciplinary proceedings are said to have been initiated and not prior thereto. Pendency of a preliminary enquiry, therefore, by itself cannot be a ground for invoking Clause 20 of the Regulations."

16. In absence of any rules, therefore, a disciplinary proceeding against a retired employee should have been continued. The judgment of the High Court, in our opinion, cannot be said to be faulty. We, however, keeping in view the subsequent documents brought before us by the appellant, would observe that, in future in any other case or before any other authority, the Corporation would be at liberty to place all the relevant documents and to that effect the question of law raised by the appellant herein shall remain open."

18. In Director General, EST & Another v. T. Abdul Razak, etc., 4

the Hon'ble Apex Court held as follows:

"10. At the outset, it may be stated that in the applications that were filed by the respondents the challenge was mainly to the memoranda dated October 20, 1983, January 21, 1985 and July 18/25, 1986 regarding initiation of disciplinary proceedings by the Regional Director and the order dated March 6, 1987 passed by the

1996 4 SCC 708

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Director General imposing the penalty of reduction in rank on respondent, T. Abdul Razak. The order dated March 6, 1987 was passed by the Director General himself who was the disciplinary authority and it is not open to challenge on the ground of delegation of powers by the Director General. The validity of the said order was challenged on the basis that the Regional Director was not competent to initiate the disciplinary proceedings in which the order was passed. The Tribunal was, therefore, primarily concerned with the validity of three memoranda referred to above regarding initiation of disciplinary proceedings by the Regional Director. In this context, it may be mentioned that no order of the Director General delegating his powers regarding initiation of disciplinary proceedings under Regulation 13(1) had been laced before the Tribunal. The two orders of the Director General dated May10, 1974 and July 18, 1981, which were under challenge, had been passed under Regulation 12(2) whereby the Director General had delegated the powers to impose minor penalties specified in clauses 9i) to (iv) of Regulation 11 in respect of certain categories of employees specified therein on the officers specified therein. Therefore, in so far as the validity of the memoranda regarding initiation of disciplinary proceedings against the respondents in concerned the question regarding delegation of powers by the Director General did not arise for consideration and the Tribunal was no required to deal with the question regarding validity of Rule 16(2), Regulations 12(2) and 13(1), the resolution of the Standing Committee dated May 24, 1986 and the orders of the Director General dated May 10, 1974 and April 91 1981. With regard to initiation of disciplinary proceedings by the Regional Director, we find that the legal position is well settled that it is not necessary that the authority competent to impose the penalty must initiate the disciplinary proceedings and that the proceedings can be initiated by any superior authority who can be held to be the controlling authority who may be an officer subordinate to the appointing authority. [See :

State of Madhya Pradesh v. Shardul Singh2, P.V. Srinivasa Sastry v. Comptroller & Auditor General3 and Inspector General of Police & Anr. V. Thavasiappan4. The Regional Director, being the officer in charge of the region, was the controlling authority in respect of the respondents. He could institute the disciplinary proceedings against the respondents even in the absence of specific conferment of a power

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in that regard. The memoranda dated October 20, 1983, January 21, 1985 and July 18/25, 1986 regarding initiation of disciplinary proceedings against the respondents by the Regional Director, therefore, do not suffer from any legal infirmity and the applications filed by the respondents before the Tribunal are liable to be dismissed. But since the Tribunal has pronounced upon the validity of Rule 16(2), Regulations 12(2) and 13(1), the resolution of the Standing Committee dated May 24, 1968 and orders dated May 10, 1974 and April 9, 1981 passed by the Director General it becomes necessary to examine the correctness of the decision of the Tribunal in that regard.

11. The law is well settled that in accordance with the maxim delegatus non potest delegare, a statutory power must be exercised only by the body or officer in whom it has been confided, unless sub-

delegation of the power is authorised by express words or necessary implication. [See: Halsbury s Laws of England, 4th Edn. Vol. 1 para 32 p. 34; Craies on Statute Law, 7th Edn p. 316; The Barium Chemicals Ltd. and Anr. v. The Company Law Board and Others5 and Sahni Silk Mills (P) Ltd. and Anr. v. Employees State Insurance Corporation6.

In Sahni Silk Mills (P) Ltd, and Anr. v. The Employees State Insurance Corporation (supra) this Court has approved the decision of the Karnataka High Court in The Employees State Insurance Corporation, Bangalore v. Shoba Engineers, Bangalore and Ors. (supra). It has been held that Parliament while introducing Section 94- A in the Act only conceived direct delegation by the Corporation to different officers or authorities subordinate to the Corporation and there is no scope for such delegate to sub-delegate that power, by authorising any other officer to exercise or perform the powers so delegated. The Tribunal has, therefore, rightly held that Section 94-A does not specifically provide that an officer or authority subordinate to the Corporation to whom the power has been delegated by the Corporation can, in his turn, authorise any other officer to exercise that power or function. But the question that arises is whether Rule 16(2) of the Rules and Regulations 12(2) and 13(1) of the Regulations relate to exercise of powers or functions of the Corporation or the Standing Committee delegated to the Director General by the Corporation or the Standing Committee under Section 94-A of the Act. In order to answer this question, it is necessary to make a distinction

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between a power conferred on the Director General under a rule made in exercise of rule making power under Section 95 or under a regulation made in exercise of power to make regulations under Sections 97(2)(xxi) and 17(2) of the Act and a power or function of the Corporation or the Standing Committee which is delegated to the Director General under Section 94-A. A rule or a regulation made in exercise of a power conferred by a statute being in the nature of subordinate legislation is statutory in character while a resolution of a Corporation or a Standing Committee is purely administrative in nature. Therefore, the power conferred on the Director General under a rule or a regulation is in the nature of a statutory power that has been conferred independently on the Director General. It cannot be regarded as delegation of powers and functions of the Corporation or the Standing Committee under Section 94-A of the Act. Section 94-A speaks of "powers and functions which may be exercised or performed by the Corporation or the Standing Committee". The said powers and functions are other than the powers that are conferred independently on the Director General under the Rules or the Regulations.

12. On that view of the matter Regulations 12 and 13 must be construed as conferring independent powers on the Director General and it cannot be said to be the powers and functions of the Corporation or the Standing Committee that have been delegated to the Director General by the Corporation or the Standing Committee under Section 94-A. Regulation 12(2) which empowers the Director General to specify by general or special order the authority which can also act as a disciplinary authority and Regulation 13(1) which authorises the Director General to empower by general or special order any other authority to institute disciplinary proceedings against an employee, cannot be regarded as empowering further delegation by the Director General of powers delegated to him. The Tribunal was, therefore, in error in striking down the words "or any other authority specified in this behalf by a general or special order of the Director General" in Regulation 12(2) and the words "or any other authority empowered by him by general or special order may" in Regulation 13(1) on the view that they permit further delegation by the Director General of the powers delegated to him which is impermissible. The decision of the Tribunal in this regard cannot be upheld and the

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offending words in Regulations 12(2) and 13(1) must be treated as a valid conferment of power on Director General to delegate his powers under the said Regulations. The orders date May 10, 1974 and April 9, 1981 were passed by the Director General in exercise of the powers conferred on him under Regulation 12(2). By the said orders the Director General delegated the powers to impose minor penalties specified in clauses (i) to (iv) of Regulation 11 in respect of certain categories of employees and the officers specified in the said orders. Since the offending part of Regulation 12(2) has been found to be valid the said orders dated May 10, 1974 and April 9, 1981 must be held to have been validly issued in exercise of the power of delegation conferred on the Director General under Regulation 12 (2)."

19. In Thomas Daniel v. State of Kerala & Ors 5, the Hon'ble held as

follows:

"13. In State of Punjab and Others v. Rafiq Masih (White Washer) and Others, (2015) 4 SCC 334 wherein this court examined the validity of an order passed by the State to recover the monetary gains wrongly extended to the beneficiary 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

2022 AIR (SC) 2153

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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.

XXX XXX XXX

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 impermissible in law:

(ii) 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."

14. Coming to the facts of the present case, it is not contended before us that on account of the misrepresentation or fraud played by the appellant, the excess amounts have been paid. The appellant has retired on 31.03.1999. In fact, the case of the respondents is that excess payment was made due to a mistake in interpreting Kerala Service Rules which was subsequently pointed out by the Accountant General.

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15. Having regard to the above, we are of the view that an attempt to recover the said increments after passage of ten years of his retirement is unjustified."

20. In State of Punjab and others v. Rafiq Masih (White Washer)

etc., the Hon'ble Apex Court made the following observations:

"11. For the above determination, we shall refer to some precedents of this Court wherein the question of recovery of the excess amount paid to employees, came up for consideration, and this Court disallowed the same. These are situations, in which High Courts all over the country, repeatedly and regularly set aside orders of recovery made on the expressed parameters.

...

All arbitrary actions are truly, actions in violation of Article 14 of the Constitution of India. The logic of the action in the instant situation, is iniquitous, or arbitrary, or violative of Article 14 of the Constitution of India, because it would be almost impossible for an employee to bear the financial burden, of a refund of payment received wrongfully for a long span of time. It is apparent, that a government employee is primarily dependent on his wages, and if a deduction is to be made from his/her wages, it should not be a deduction which would make it difficult for the employee to provide for the needs of his family. Besides food, clothing and shelter, an employee has to cater, not only to the education needs of those dependent upon him, but also their medical requirements, and a variety of sundry expenses.

...

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 Qadir's 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

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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 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 employee's retirement, or within one year of the date of his retirement on superannuation. (iv). Last of all, reference may be made to the decision in Sahib Ram Verma v. Union of India, (1995) Supp. 1 SCC 18, wherein it was concluded as under:

"4. Mr. Prem Malhotra, learned counsel for the appellant, contended that the previous scale of Rs 220-550 to which the appellant was entitled became Rs 700-1600 since the appellant had been granted that scale of pay in relaxation of the educational qualification. The High Court was, therefore, not right in dismissing the writ petition. We do not find any force in this contention. It is seen that the Government in consultation with the University Grants Commission had revised the pay scale of a Librarian working in the colleges to Rs 700-1600 but they insisted upon the minimum educational qualification of first or second class M.A., M.Sc., M.Com. plus a first or second class B.Lib. Science or a Diploma in Library Science."

...

12. 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

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few situations, wherein recoveries by the employers, would be impermissible in law:

(i) Recovery from employees belonging to Class-Ill 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."

21. Further, the respondents, having promoted the petitioner to the

post of Manager (Finance)/Accounts Officer and having verified the

certificates submitted by the petitioner at the time of his promotion, are

now estopped from taking the plea that the petitioner has obtained the

Degree certificate without prior permission.

22. In view of the above peculiar facts and circumstances of the case

and having regard to the law laid down by the Hon'ble Apex Court and

this Court vide Judgments referred supra, this Court is of the

considered view that the impugned order vide Lr.Rc.No.151/A1/2012,

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dated 17.06.2013, issued by the 2nd respondent is liable to be set aside

and is hereby set aside.