Telangana High Court
Smt. K. Rajani vs The Hindustan Fluro Carbons Ltd., on 10 July, 2025
Author: Nagesh Bheemapaka
Bench: Nagesh Bheemapaka
HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA
WRIT PETITION No. 20076 OF 2019
O R D E R:
Petitioner assails the proceedings dated 17.05.2019
whereby and whereunder, respondent while accepting her
resignation from the post of Company Secretary, sought to
recover Rs. 9,21,207-54 modified as Rs. 8,79,094/- by office
order dated 26.06.2019 on the ground that the said amount
was paid in excess of her entitlement by way of salary
erroneously.
2 The case of petitioner is that she joined respondent
company on 19.05.2011 as Company Secretary (Assistant
Manager) in E-2 Scale i.e 10750-300-16750. It is stated, by the
time of her appointment, pay revision of 2007 was under
consideration. According to her, she was appointed as Assistant
Manager in E-3 scale as per the 111th board meeting held on
27.01.2005, hence, company rectified the mistake and gave the
scale of E-3 i.e 13000-350-18250 in September, 2011 with the
approval of the competent authority and the samething was
mentioned in its 144th board meeting held on 05.05.2010. It is
stated, Assistant Manager scale is E3 i.e 24900-50500 as per
157th board meeting held on 25.05. 2012. In terms of the above
policy, company has given Assistant Manager (E3) and
promoted Deputy Manager (E4) i.e 29100-54500 in 2017 as per
111th board meeting held on 27.01.2005.
It is stated, as per the terms of appointment order,
she was eligible for 30% HRA as was mentioned in Department
of Public Enterprise Guidelines (DPE) on 2007 wage revision
and the same was approved by the Board of Directors at the
time of approval of 2007 Wage Revision. It is further stated that
in the 111th board meeting, a decision was taken to consider
promotion/up-gradation to the eligible non-officers against
vacancies and as per the said board meeting and the promotion
policy, the Assistant Manager was placed in E-3 scale. It is
stated, the Assistant Manager placed in E-3 category was
promoted to Deputy Manager in E-4 category with a pay scale of
29100-54500 in 2017 as per the 111th board meeting held on
27.01.2005.
As things stood thus, respondent in 2011, in the
198th board meeting, rectified the anomaly that arose in
upgrading the Engineers/officers and their pay scales as per
1992 pay revision and rectification of anomaly was implemented
with effect from 01.01.1997 during September 2011;
rectification was carried out and the board approved the same
specifically observing that the basic pay scale was notionally
approved with effect from 01.01.1997 to those who were on
payrolls of the company as on 22.09.2011. Though 2007 Wage
revision guaranteed HRA at 30%, at the time of implementing
2007 Wage Revision in 2012, the management granted
protected HRA on 1997 wage Revision which affected the total
gross salary payable to petitioner.
In the meantime, the Managing Director of
respondent issued instructions to the Finance Department
stating that there is incorrect fixation of pay for 2007 wage
revision and advised to verify and submit a report. It is stated,
the Finance Department put up a note showing the difference in
basic pay fixation against the names of the employees;
thereafter the management engaged the services of a
professional team of chartered accountants to investigate the
entire issue. On receipt of report, the respondent management
appears to have found that fixation of basic salary to 18 officers
was a mistake and they were given the benefit without having
eligibility and recommended that pay to those 18 officers be
refixed. Accordingly, the management by proceedings dated
26.03.2019, reduced the salary from February 2019 without
giving any written intimation to affected employees including
petitioner. In view thereof, by an e mail dated 27.03.2019,
petitioner is stated to have tendered resignation which was
accepted on 17.05.2019, however Rs. 8,79,094/-was shown as
due to the company and full and final settlement of her account
was kept pending till the dues were paid. By an e mail dated
30.03.2019, petitioner had given point-wise reply and requested
the authorities that in the event of reconsidering her case
without deducting the salary based on the merit, she would
continue to serve the company. It is stated, by letter dated
23.05.2019, the management, while accepting her resignation,
informed that she would be relieved from the services subject to
payment of excess amount paid i.e Rs. 9,21,207.54, modified by
order dated 26.06.2019 showing the due payable as Rs.
8,79,094/- .
The grievance of petitioner is that management
having initially recruited her in E-3 scale in 2011, cannot, after
serving the company for eight years, claim to have committed
error in fixing the scale and claim back the amount said to have
been paid by way of salary in excess of entitlement.
3. In the counter, it is stated that respondent company
is a subsidiary of M/s Hindustan Organic Chemicals Limited (A
Government of India Enterprise), Mumbai, engaged in the
manufacture of PTFE (Poly tetra flouro Ethylene), an
engineering versatile plastic. On account of various reasons, the
company was declared as "Sick Industrial Company" and it is
not in a position to meet its employees' salaries on time and is
able to pay only 80% of salary to the employees.
It is stated, Petitioner was appointed as Company
Secretary and was issued Part II Order No.114 of 2011 dated
19.05.2011 placing in the pay scale of 10750-300-16750 with
an initial basic pay of Rs.10,750/- p.m. with effect from
19.05.2011 which is equivalent to the pay scale of Senior
Officer and nowhere it is stated neither she is an Assistant
Manager nor the scale offered to her was the scale of Assistant
Manager as alleged. Petitioner's services were deemed
regularized only with effect from 19.05.2012.
It is stated that during 2005, an issue has come
before the Board of the Respondent Company to consider
promotions/up gradation to the eligible non-officers against
vacancies to the officer cadre that needed to be filled on urgent
basis. It is submitted that in 111th Board meeting, it is
considered to promote only from non-officers to officers on need
based requirement and authorized the Managing Director
accordingly. As the issue deals with promotions of non-officers
to the cadre of officers, the same has no relevance to the case of
petitioner who joined in the officer cadre.
While things remain thus, it seems a complaint was
received in the Vigilance Department of Ministry of Chemicals &
Petrochemicals, Delhi alleging that some employees of the
Respondent Company were given undue benefit by fixing their
scales wrongly. It is submitted that the under Secretary
(Vigilance), Ministry of Chemicals & Petrochemicals, Delhi had
visited the Respondent Company at Hyderabad during 2018 for
investigation into the complaint and instructed investigation.
The Chief Vigilance Officer examined the pay scale of Mr. A.
Ramesh, Assistant Manager (Finance) and having found that
there was deviation and the same was corrected, recovered
excess payment by the management on the instructions of
Under Secretary (vigilance), Ministry of Chemicals and
Petrochemicals. On the complaint of Ramesh, the Managing
Director vide letter dated 23.02.2018 gave instructions to the
C.V.O of the company to examine the pay scale fixation of all the
employees (ie. 114 existing employees and 21 retired). The CVO
found deviation in basic pay of 46 employees out of 114
employees and in his report, it was observed that the then
Admn.-Legal T.R.Laxman created a wrong anomaly for pseudo
benefit and it was applied to the entire cadre. It was also
observed that TR Laxman intentionally deviated by colluding
with leaders of Employee Trade Unions. The employees receiving
excess amount are being recovered by the Company as
instructed and Part-II orders were issued re-fixing the basic pay
and pay scales.
It is submitted that on 12.11.2018, the General
Secretary of the Trade Union issued letter alleging that officers
whose pay anomaly was rectified in 2011 was not re-verified by
the CVO though they are not entitled for the same. The
management thereafter, issued work order to a Chartered
Accountant firm in February, 2019 for verification of
irregularities in pay scales and basic pay fixed to 18 officers of
the company against 1997 and 2007 pay/wage revisions. The
Firm gave a comprehensive report and as regards petitioner, it
was observed that the correct designation is Senior Officer at
the time of appointment and pay scale promotion could have
been to the Assistant Manager Cadre in 2017 and not to Deputy
Manager and excess amount of Rs. 9,01,176/- was paid.
Therefore, the Company issued circular on 22.03.2019
instructing all the employees to repay the excess amount. It is
submitted that recovery was also made from the undersigned.
While so, Petitioner issued email on 30.03.2019
proposing to resign unless the pay scale of January, 2019 are
paid. In reply thereto, the management specifically pointed out
in their letter dated 23.05.2019 that petitioner's basic pay was
erroneously altered within 4 months of joining and while in
probation though the same was impermissible and the
petitioner being Company Secretary was fully aware of the fact
that upgradation in basic pay during probation is not
permissible but had intentionally kept quiet. It is stated that TR
Laxman incorrectly promoted her to the category of Deputy
Manager in E4 scale and this led to excess payment. It is
submitted that TR Laxman had retired from service and the
company is examining possibilities of initiating legal action
against him. as petitioner received excess amount as against
her legitimate eligibility in the cadre of Company Secretary, it is
not open to blame respondent company which is safeguarding
the interests of the Public Sector Undertaking
4. Petitioner filed reply denying the averments in the
counter affidavit. It is stated that the Government of India has
now taken a decision for winding up respondent company; the
promotion order dated 12.06.2017 would clearly indicate that
petitioner was working in E-3 scale and was promoted to the
post of Deputy Manager (secretarial) in the pay scale of E-4,
since she falls under the category 'A'. Further, the letter of
acceptance of resignation dated 23.05.2019 clearly indicates
that petitioner had joined the organisation in the pay scale of
Assistant Manager category E-2. These two documents belittle
the case of the respondent that petitioner was never appointed
as Assistant Manager nor the scale offered to her was that of
Assistant Manager.
Respondent committed error for which petitioner
cannot be put to suffering and she has right to seek salary as
per Pay scales of January 2019. Issue of excess payment was
raised by the Company due to their own mistake for which the
employees cannot be put to suffering and the Company cannot
recover from salary and accrued benefits. Company has become
sick cannot be a reason to make false and unsustainable
claims. It is also stated, respondent forwarded Form-16 for
2019-2020 in which petitioner's designation was shown as
Deputy Manager, which is now sought to be contradicted.
5. Heard Sri T. Sharath, learned counsel for petitioner
as well as Sri Y. Venkateswarlu, learned Standing Counsel for
respondent.
6. Learned counsel for petitioner relied on the
judgment of the Hon'ble Supreme Court in State of Punjab v.
Rafiq Masih (White Washer) 1. In para 18, it has been observed
as under:
" 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
(2015) 4 SCC 334
hereinabove, we may, as a ready reference, summarise the following few
situations, wherein recoveries by the employers, would be 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".
7. Learned Standing Counsel also relied on the
judgments of the Hon'ble Supreme Court in Chandi Prasad
Uniyal v. State of Uttarakhand 2 and Registrar, Cooperative
Societies, Haryana v. Israil Khan 3.
8. In Chandi Prasad Uniyal's case, the Hon'ble
Supreme Court considering the various judgments was of the
opinion that except few instances pointed out in Syed Abdul
Qadir v. State of Bihar {(2009) 3 SCC 475} and Col. B.J.
(2012) 8 SCC 417
(2010) 1 SCC 440
Akkara v. Govt. of India {(2006) 11 SCC 709}, the excess
payment made due to wrong / irregular pay fixation can always
be recovered. While coming to the said conclusion, in para 14, it
has been observed as under:
" It is no doubt true that the term 'pay', with reference
to medical officers, includes the basic pay and NPA. But the term 'basic
pay' does not include NPA. In the absence of any special definition, the
term 'basic pay of a government servant' refers to the applicable stage of
pay in the pay scale to which he is entitled, and does not include NPA
even in the case of Medical Officers. What the circular dated 7.6.1999
intended to extend by way of benefit to all pensioners, was a minimum
pension, that is, 50% of the minimum pay in the 1996 revised scale of
pay. NPA has no part to play in the minimum that is sought to be
assured. NPA has relevance only for initial fixation of pension and not
for stepping up pension under Circular dated 7.6.1999.
9. In Israil Khan's case (supra), the Hon'ble
Supreme Court in para 10 observed as under:
" In these cases, the Rules specifically provided that
the employees should be paid a consolidated salary. Therefore without
amendment of the Rules, the Managing Committees could not have
passed a resolution for giving the benefit of regular pay scales that too
with retrospective effect to the employees. Further, the Societies did not
have the funds to make such payments and illegally diverted the funds
made available for disbursal of loans to farmers, for the purpose of
making such excess payment to the employees. When the resolution
extending such benefit was passed and the amounts earmarked for
loans for farmers were diverted for making payment to the employees,
the Managing Committees as well as the employees were aware that the
resolution and consequential payment was contrary to the Rules. There
was no question of any wrong calculation or erroneous understanding of
the legal position. Most of the employees who received similar relief have
refunded or have agreed to refund the excess payment. Making any
exception in the case of the respondents would also lead to
discrimination".
10. In view of the above-settled legal position, the case
of petitioner is that, as is evident from the promotion order
dated 12.06.2017 and letter of acceptance of resignation dated
23.05.2019, petitioner joined the organisation in the pay scale
of Assistant Manager category E-2, hence, respondent is wrong
in arguing that petitioner was never appointed as Assistant
Manager nor the scale offered to her was that of Assistant
Manager. According to petitioner, for the error committed by
them, respondent - Company cannot recover from salary and
accrued benefits of the employees. Further, Form-16 of 2019-20
also shows her designation as Deputy Manager, which is now
sought to be contradicted by respondent.
11. Whereas the case of respondent is that the report of
the Chartered Accountants shows that the correct designation
of petitioner is Senior Officer at the time of appointment and
promotion could have been to the Assistant Manager cadre in
2017 and not to Deputy Manager. While so, Petitioner issued
e mail on 30.03.2019 proposing to resign unless the pay scale of
January, 2019 are paid. In reply thereto, the management
specifically pointed out in their letter dated 23.05.2019 that
petitioner's basic pay was altered within four months of joining
and petitioner being Company Secretary was fully aware of the
fact that upgradation in basic pay during probation is not
permissible, had intentionally kept quiet. Petitioner being a
Company Secretary was well aware of the incorrect pay fixations
and the observations in the CVO report referred to against TR
Laxman, the then Admn.-Legal. It is stated that TR Laxman
incorrectly promoted petitioner to the category of Deputy
Manager in E4 scale and this led to excess payment. The said
TR Laxman retired from service and the Company is examining
possibilities of initiating legal action against him.
12. As rightly stated by respondent, petitioner being the
Company Secretary ought to have challenged the alternation of
basic pay scale then and there itself, but it appears she
intentionally kept quiet. In view of the specific case of
respondent, it can be said that Petitioner received excess
amount as against her legitimate eligibility and being in the
cadre of Company Secretary, it is not open for her to blame the
respondent Company.
13. Learned Standing Counsel has brought to the
notice of this Court that Respondent is a Sick Company and is
in revival process, hence, all the employees ie. workers &
officers are voluntarily accepting 80% salary as against their
eligibility to become part of the revival process of the company
which will safeguard their interest of continuous employment
and protect their families. It is to be noticed that most of the
employees have refunded the alleged excess amount. In the said
circumstances, the action taken by Respondent Company
cannot be termed as unfair or illegal, as was held by the Hon'ble
Supreme Court in Israil Khan's case (supra).
14. In the light of the above, this Court is of the view
that excess payment made due to wrong / irregular pay fixation
can be recovered, as held by the Hon'ble Supreme Court in
Chandi Prasad Uniyal's case (supra). Hence, the Writ Petition
is liable to be dismissed.
15. For the foregoing reasons, the Writ Petition is
dismissed. No costs.
16. Consequently, Miscellaneous Applications, if any
shall stand closed.
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NAGESH BHEEMAPAKA, J
10th July 2025
ksld
