Union of India Vs J.K. Tah

4 - The Superintendent Of Post Offices Bilaspur Division, Office Of Superintendent Postal, Bilaspur Division, Bilaspur, District - Bilaspur Chhattisgarh

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... Petitioner(s)

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versus

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1 - J.K. Tah S/o Shri Madanlal Tah Aged About 60 Years Retired Postal Assistant, R/o Opposite To Red Cross Medical College Road, Gondpara, Bilaspur, District - Bilaspur Chhattisgarh

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... Respondent

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(Cause-title is taken from Case Information System)

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For Petitioners : Ms. Shweta Rai, Advocate appearing on behalf of Mr. Siddharth Rathod, Advocate For Respondent : Mr. J. K. Tah, Respondent In-person

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(Division Bench)

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(Hon’ble Shri Justice Sanjay S. Agrawal

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Hon'ble Shri Justice Amitendra Kishore Prasad)

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Order On Board

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24.03.2026

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Per; Amitendra Kishore Prasad, Judge

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The present petition has been preferred by the Petitioners challenging the order dated 31.01.2025 passed by the learned Central Administrative Tribunal, Jabalpur in O.A. No. 203/688/2023, whereby the Tribunal has quashed the recovery orders dated 11.08.2018 and 02.03.2023 and has further directed the Petitioners to refund the recovered amount to the Respondent along with interest at the rate of 6% per annum. The Petitioners have assailed the said order on the ground that the Tribunal failed to appreciate that the Respondent had obtained House Rent Allowance (HRA) by misrepresentation despite being ineligible, as the official accommodation provided at Sub Post Office, Takhatpur was residential in nature, and the recovery initiated by the department pertained to public money wrongly disbursed, which was lawful and justified. Hence, the present petition seeking following reliefs :

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“a. This Hon'ble Court may kindly be pleased to call for entire records

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pertaining to the case of the respondent for perusal of this Hon'ble Court.

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b. This Hon'ble Court may kindly be pleased to quash the Order dated 31.01.2025 passed by the learned Presiding members, Central Administrative Tribunal, Jabalpur in O.A 203/688/2023 so far as quashing the order dated 11-08-2018 and 02-03-23 and directing petitioner herein to refund the entire recovered amount to the respondent herein with interest of 6% per annum from the date of recovery being illegal, arbitrary and without jurisdiction.

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c. Cost of proceedings.

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d. Any other relief as this Hon'ble Court may be pleased to grant.”

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Facts of the case, in brief, is that the Petitioner is a governmental institution responsible for providing postal and allied services, wherein employees are provided with two categories of accommodation depending upon the nature of the post and place of posting. The first category comprises residential premises attached to Sub-Post Offices, including accommodation for the Sub Postmaster, in which case the employee is not entitled to receive House Rent Allowance (HRA). The second category pertains to non-residential premises, where no such accommodation is provided and, consequently, the employee becomes entitled to HRA. As per Rule 4(b)(i) of the Fundamental Rules and Supplementary Rules (FR & SR), Part IV, HRA is not

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admissible to an employee who occupies Government accommodation or to whom such accommodation has been offered, regardless of whether the employee chooses to reside therein or not. It is further the case of the Petitioner that a premise can be treated as non-residential only upon a formal declaration by the competent authority in accordance with the prescribed rules. In absence of such declaration, no employee can claim HRA merely on the ground that the accommodation is unsuitable or inconvenient. Even if an employee voluntarily opts to reside elsewhere, the entitlement to HRA does not arise unless the accommodation provided by the department is officially declared non-residential. In the present case, the Respondent was transferred and posted as Sub Postmaster at Sub-Post Office Takhatpur and discharged his duties there from 19.09.2013 to 01.07.2017. The said Post Office was functioning from a privately rented building, for which rent was being duly paid by the Petitioner Department. Importantly, the said building included residential accommodation for the Sub Postmaster and was never declared as a non-residential premise by any competent authority. Therefore, as per the applicable rules, the Respondent was not entitled to receive HRA during the said period. Despite the above position, the Respondent made repeated representations to the Petitioner department alleging that the provided accommodation was not suitable for residence due to poor condition, lack of facilities, and insufficient space. On the basis of such

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representations, the Respondent sought declaration of the premises as non-residential and claimed HRA on the ground that he was residing in a rented accommodation. The Petitioner contends that these representations were factually incorrect and amounted to misrepresentation, particularly in light of the Respondent’s knowledge that no formal declaration of the premises as non-residential had been made and that no order granting HRA had been issued in his favour. As a consequence of such misrepresentation, the Petitioner department inadvertently disbursed HRA to the Respondent for the period from 19.09.2013 to 01.07.2017, amounting to a total sum of Rs. 89,430/-. The Respondent continued to receive the said amount without raising any objection, despite being fully aware that he was not entitled to the same under the governing rules. Being a public servant, the Respondent was under a duty to inform the department of the erroneous payments; however, he failed to do so and continued to benefit from the same unlawfully. Upon discovery of the said irregularity, the Petitioner, treating the payment as wrongful disbursement of public funds, initiated recovery proceedings vide communication dated 11.08.2018 for the total amount of Rs. 89,430/-. In order to avoid financial hardship to the Respondent, the recovery was structured in monthly instalments of Rs. 2,000/- from his salary. It is pertinent to note that such recovery was not punitive in nature but was undertaken solely to recover public money that had been paid without legal

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entitlement. Aggrieved by the recovery, the Respondent preferred an appeal before the Director Postal Services, Chhattisgarh Circle, Raipur on 11.01.2019 seeking stoppage of the deduction. The said appeal was considered and rejected by the competent authority vide order dated 02.03.2023, affirming that the recovery was lawful and justified, particularly in view of the fact that the premises in question had never been declared non-residential. Subsequently, the Respondent filed Original Application No. 688/2023 before the learned Central Administrative Tribunal on 13.07.2023, reiterating his claim that the accommodation provided was unfit for residence and that he was entitled to HRA. The Petitioner filed a detailed reply denying the assertions and reiterating that the Respondent had no legal entitlement to HRA in absence of any declaration of the premises as non-residential and in light of the clear provisions of the applicable rules. The Petitioner further submitted that the Respondent had drawn the HRA amount unlawfully due to his own misrepresentation and that the recovery initiated was both just and necessary to safeguard public funds. It was also emphasized that the recovery was being effected in a reasonable and humanitarian manner through small instalments. However, the learned Tribunal, without adequately considering the reply of the Petitioner, the applicable statutory provisions, and the factual matrix, allowed the Original Application primarily relying upon the principle laid down in State of Punjab v. Rafiq Masih, holding that recovery from a Class III employee is

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impermissible. Consequently, the Tribunal quashed the recovery orders and directed the Petitioner to refund the recovered amount along with interest at the rate of 6% per annum. The Petitioner contends that the learned Tribunal failed to appreciate the wellsettled exception to the rule against recovery, namely that recovery is permissible in cases where excess payment has been made due to misrepresentation or fraud on the part of the employee. In the present case, the wrongful payment of HRA was a direct consequence of the Respondent’s misrepresentation, and therefore, the recovery was legally sustainable. It is further contended that the Original Application itself was filed belatedly and was not maintainable in law. In view of the aforesaid facts and circumstances, the Petitioner submits that the impugned order passed by the learned Tribunal is arbitrary, contrary to law, and unsustainable, warranting interference by this Court.

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Learned counsel for the Petitioners submits that the impugned order dated 31.01.2025 passed by the learned Central Administrative Tribunal is wholly illegal, arbitrary and without jurisdiction, inasmuch as it quashes the lawful orders dated 11.08.2018 and 02.03.2023 and further directs refund of the recovered amount along with interest at the rate of 6% per annum. It is contended that the Tribunal has failed to appreciate the true factual and legal matrix of the case and has erroneously interfered with a recovery that was initiated strictly in accordance with law to safeguard public funds. It is further submitted that the

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Respondent had obtained the benefit of House Rent Allowance (HRA) by furnishing incorrect and misleading information to the Petitioner department. The Respondent falsely represented that the premises at Sub-Post Office, Takhatpur were not feasible for residential use and that he was residing in a privately rented accommodation, thereby projecting himself as entitled to HRA. Learned counsel contends that such representation was not only factually incorrect but also legally untenable, as entitlement to HRA is governed strictly by statutory rules and not by the subjective convenience of the employee. Learned counsel submits that the Tribunal has failed to consider that no administrative order was ever issued by the competent authority declaring the said Sub-Post Office premises at Takhatpur as “nonresidential.” In absence of such declaration, the premises continued to retain its character as residential accommodation, and consequently, the Respondent was not entitled to claim HRA under the applicable rules. It is further submitted that the Petitioner department had also not issued any order granting HRA in favour of the Respondent, and therefore, the payment made to him was clearly unauthorized and liable to be recovered. It is argued that the Respondent, despite being fully aware of the fact that the premises had not been declared non-residential and that no order for grant of HRA had been issued in his favour, continued to receive the said allowance without any protest or disclosure. Such conduct, it is submitted, amounts to deliberate suppression

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of material facts and unjust enrichment at the cost of public exchequer. The learned Tribunal has failed to appreciate this crucial aspect and has erroneously granted relief to the Respondent. Learned counsel further submits that merely because the Respondent chose to reside in a privately rented house of his own volition, the nature of the official accommodation provided by the department cannot be altered from residential to non-residential. The classification of premises is determined solely by the competent authority in accordance with rules, and not by the personal preference or convenience of an employee. The Tribunal has thus committed a grave error in law by overlooking this settled principle. It is also contended that the wrongful payment of HRA to the Respondent was a direct consequence of his own misrepresentation, which misled the department into making such payments. In such circumstances, recovery of the excess amount is not only permissible but necessary to prevent loss to public funds. The Tribunal has failed to appreciate that cases involving misrepresentation or fraud stand on a different footing and are exceptions to the general principle against recovery from employees. Learned counsel further submits that the Respondent, being a public servant, was under a bounden duty to act with honesty and integrity and to inform the department about any wrongful payment made to him. However, instead of discharging such duty, the Respondent continued to receive HRA without objection, despite being aware

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that he was not entitled to the same. This conduct disentitles him from any equitable relief and renders the impugned order unsustainable. Lastly, it is submitted that the direction of the learned Tribunal to refund the recovered amount along with interest has caused serious financial prejudice to the Petitioner, which is a public institution entrusted with management of public funds. The amount in question, having been disbursed due to misrepresentation by the Respondent, constitutes public money, and permitting its retention by the Respondent would amount to unjust enrichment and miscarriage of justice. In view of the foregoing submissions, learned counsel for the Petitioners prays that the impugned order passed by the learned Tribunal be set aside as being contrary to law and the writ petition be allowed.

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At the outset, the respondent in-person submits that the present writ petition is not maintainable either in law or on facts, and is liable to be dismissed at the threshold. The respondent asserts that the petitioner has suppressed material facts and documents from this Court, particularly with regard to the actual condition of the premises at Takhatpur Sub-Post Office and the circumstances under which House Rent Allowance (HRA) was granted. The respondent submits that the petitioner has wrongly asserted that residential accommodation was provided to him. In fact, the socalled residential premises were in a dilapidated and uninhabitable condition, as duly recorded in the report dated 19.09.2013 submitted by the then Sub Postmaster as well as by

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the respondent himself to the Superintendent of Post Offices, Bilaspur Division. The said premises were being utilized for storage of official records such as NREGA, pension, savings bank documents, and other important materials, leaving no space or basic facilities for habitation. Despite such reports being duly acknowledged by the department, no allotment order or license for occupation of the said premises was ever issued in favour of the respondent. In these circumstances, the respondent was constrained to reside in a rented accommodation and was rightly paid HRA. It is further submitted that the grant of HRA to the respondent from 19.09.2013 to 01.07.2017 was neither illegal nor based on any misrepresentation. Rather, it was allowed by the competent authority with full knowledge of the factual situation and continued without objection for several years, thereby amounting to implied or “silent approval.” The respondent denies having made any misrepresentation and submits that only one report highlighting the actual ground condition of the premises was submitted, which was duly acknowledged but never acted upon adversely. Thus, the allegation of “misrepresentation” is baseless and intended to mislead this Court. The respondent further contends that entitlement to HRA is not solely dependent upon whether a premises is formally declared as “non-residential,” but also on whether the accommodation provided is actually habitable. In the present case, the premises were admittedly uninhabitable and unfit for residence, and therefore, as per

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applicable rules and instructions, the respondent was entitled to receive HRA. The respondent also places reliance on relevant instructions and judicial precedents to submit that where accommodation is not in a habitable condition or is not formally allotted, denial of HRA would be unjustified. It is also submitted that the recovery order dated 11.08.2018 is illegal and without jurisdiction, having been issued by an authority not competent to do so. The respondent, being a Group “C” employee, could not have been subjected to such recovery, particularly in light of the settled law laid down by the Hon’ble Supreme Court regarding impermissibility of recovery from employees of such category. Moreover, even as per information obtained under the Right to Information Act, the competent authority has stated that no such recovery order was issued by it, rendering the impugned recovery wholly unsustainable. The respondent further submits that the petitioner’s contention regarding “loss of public money” is misconceived and misleading. It is clarified that salary components such as HRA are paid from the Consolidated Fund of India, whereas funds collected under small savings schemes are part of the Public Account of India. Therefore, the petitioner’s attempt to portray the payment of HRA as a loss to public exchequer is factually and legally untenable. It is also pointed out that the respondent had been diligently pursuing his remedies by first submitting representations, then filing an appeal in 2019, which remained pending for over four years, and thereafter

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approaching the Central Administrative Tribunal. The Tribunal, after considering the material on record and applicable law, rightly allowed the Original Application and set aside the recovery, directing refund of the amount. The said order is just, legal, and in accordance with settled principles of law, and does not warrant interference by this Court. In light of the foregoing submissions, the respondent prays that the present writ petition, being devoid of merit and based on suppression of material facts, be dismissed in the interest of justice.

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Heard learned counsel for the Petitioners and the Respondent appearing in person. Perused the pleadings, documents placed on record, and the impugned order dated 31.01.2025 passed by the learned Central Administrative Tribunal, Jabalpur in O.A. No. 203/688/2023.

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The primary issue that arises for consideration in the present writ petition is whether the learned Tribunal was justified in quashing the recovery orders dated 11.08.2018 and 02.03.2023 and directing refund of the recovered amount along with interest, particularly in light of the Petitioners’ contention that the Respondent had obtained House Rent Allowance (HRA) by misrepresentation.

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At the outset, this Court finds that the foundational plea of the Petitioners rests on the allegation of “misrepresentation” on the part of the Respondent. However, a careful scrutiny of the record

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reveals that such allegation is not substantiated by any cogent material. On the contrary, the material placed on record indicates that immediately upon assuming charge on 19.09.2013, the Respondent as well as the then Sub Postmaster had reported to the competent authority that the so-called residential premises were in a dilapidated and uninhabitable condition and were being utilized for storage of official records. These reports were admittedly received and acknowledged by the department. It is further evident that despite such knowledge, the department continued to release HRA to the Respondent from 19.09.2013 to 01.07.2017 without any objection. The consistent payment of HRA over a prolonged period, with full knowledge of the factual position, clearly negates the allegation of fraud or misrepresentation. At best, the case reflects an administrative lapse on the part of the department.

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The Hon’ble Supreme Court in State of Punjab vs. Rafiq Masih , reported in (2015) 4 SCC 334 has categorically held that recovery of excess payments made to employees belonging to Class III and Class IV (Group ‘C’ and ‘D’) is impermissible in law, especially when such payments were not obtained by fraud or misrepresentation. The Court further carved out specific categories where recovery would be inequitable and arbitrary and it was held as under :

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“18. It is not possible to postulate all situations of hardship, which would govern employees on the issue of

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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:

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(i) Recovery from employees belonging to Class-III and ClassIV service (or Group 'C' and Group 'D' service).

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(ii) Recovery from retired employees, or employees who are due to retire within one year, of the order of recovery.

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(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.

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(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.

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(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.”

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Relying upon the decision in the case of Rafiq Masih (supra),

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Hon'ble Supreme Court in the case of Thomas Daniel Vs. State

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of Kerala & Ors., reported in (2022) SCC OnLine SC 536 has further held that recovery from the employees after long time to be unjustified

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In the present case, the Respondent is admittedly a Group ‘C’ employee. There is no convincing evidence of fraud or deliberate misrepresentation attributable to him. Therefore, the case squarely falls within the protective umbrella laid down in Rafiq Masih (supra) . The contention of the Petitioners that recovery is permissible in cases of misrepresentation cannot be disputed as a proposition of law. However, such exception is applicable only when misrepresentation is clearly established. In the present case, as discussed hereinabove, the Respondent had disclosed the actual condition of the premises to the department, and the payments were made with full departmental knowledge. Hence, the exception does not apply.

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Further, the Hon’ble Supreme Court in Syed Abdul Qadir v. State

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of Bihar , reported in (2009) 3 SCC 475 held that recovery of excess payment is not permissible where the employee is not at fault and the payment was made due to a mistake of the employer. It was held as under :

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“ 57 . This Court, in a catena of decisions, has granted relief against recovery of excess payment of emoluments/allowances if (a) the excess amount was not paid on account of any misrepresentation or fraud on the part of the employee, and

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(b) 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.

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58. The relief against recovery is granted by courts not because of any right in the employees, but in equity, exercising judicial discretion to relieve the employees from the hardship that will be caused if recovery is ordered. But, if in a given case, it is proved that the employee had knowledge that the payment received was in excess of what was due or wrongly paid, or in cases where the error is detected or corrected within a short time of wrong payment, the matter being in the realm of judicial discretion, courts may, on the facts and circumstances of any particular case, order for recovery of the amount paid in excess. See 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 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] , V. Gangaram v. Director [(1997) 6 SCC 139 : 1997 SCC (L&S) 1652] , Col. B.J. Akkara (Retd.) v. Govt. of India [(2006) 11 SCC 709 : (2007) 1 SCC (L&S) 529] , Purshottam Lal Das v. State of Bihar [(2006) 11 SCC 492 : (2007) 1 SCC (L&S) 508] , Punjab National Bank v. Manjeet Singh [(2006) 8 SCC 647 : (2007) 1 SCC (L&S) 16] and Bihar SEB v. Bijay

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Bhadur [(2000) 10 SCC 99 : 2000 SCC (L&S) 394].”

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12. In the matter of Jogeswar Sahoo and Others Vs. District Judge, Cuttack and Others reported in 2025 SCC OnLine SC

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724 , Hon’ble Supreme Court has held as under :

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“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 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:

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“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,

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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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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:

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(i) Recovery from the employees belonging to Class III and Class IV service (or Group C and Group D service).

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(ii) Recovery from the retired employees, or the employees who are due to retire within one year, of the order of recovery.

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(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.

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(iv) Recovery in cases where an employee has wrongfully been required to discharge duties of a

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higher post, and has been paid accordingly, even though he should have rightfully been required to work against an inferior post.

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(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.”

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Applying the aforesaid settled principles to the facts of the present case, it is evident that the Respondent had not suppressed material facts; The department was aware of the condition of the premises; No allotment order/license of accommodation was issued; HRA was paid continuously for several years without objection and recovery was initiated after a considerable delay. Additionally, the respondent is a retired class – III employee, therefore too, recovery order is unsustainable in the eyes of law.

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Another significant aspect which vitiates the recovery proceedings is the issue of competence of the authority issuing the recovery order. The Respondent has specifically demonstrated that the recovery order dated 11.08.2018 was issued by an authority not competent under the applicable rules. This fact has not been effectively rebutted by the Petitioners. An order passed without jurisdiction is nullity in the eyes of law. The argument of the Petitioners that HRA could not have been granted in absence of

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formal declaration of the premises as non-residential also does not impress this Court. Entitlement to HRA cannot be examined in a purely technical manner ignoring the ground reality. Where the accommodation is admittedly uninhabitable and not formally allotted, denial of HRA would be arbitrary and unjust. The Tribunal has rightly appreciated this aspect.

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The plea of “public money” advanced by the Petitioners, though attractive at first blush, cannot override settled equitable principles laid down by the Hon’ble Supreme Court. Recovery from a lowpaid employee after several years, particularly when the employer itself was responsible for the payment, would be harsh, inequitable, and legally impermissible. This Court also finds no infirmity in the direction of the Tribunal for refund of the recovered amount along with interest at the rate of 6% per annum, as the recovery itself has been rightly held to be illegal.

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In view of the foregoing analysis, this Court is of the considered opinion that the learned Central Administrative Tribunal has passed a well-reasoned and legally sustainable order after due consideration of the facts and the law applicable to the case. The Petitioners have failed to demonstrate any perversity, illegality, or jurisdictional error in the impugned order warranting interference under Article 226 of the Constitution of India.

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Accordingly, the writ petition being devoid of merit is hereby dismissed . The order dated 31.01.2025 passed by the learned

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Central Administrative Tribunal, Jabalpur in O.A. No. 203/688/2023 is hereby affirmed.

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No order as to costs.

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Sd/Sd/- (Sanjay S. Agrawal) (Amitendra Kishore Prasad) Judge Judge

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Shayna

Union of India v. J.K. Tah

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Union of India v. J.K. Tah

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