Allowed

H S Barad v. State of Gujarat

Gujarat HC1 Nov 2018SCA/24265/2006

Case brief

AI extract

What is this about?

The High Court allowed the Special Civil Application, directing the respondents to refund Rs. 1,22,869/- to a retired Sales Tax Officer along with 8% interest within six weeks. The court held that recovery is impermissible as it would cause undue harassment, no fraud was committed, and natural justice principles were violated. Specifically, the may proceed against their findings of fact. However,

What did the court decide?

Refund of Rs.1,22,869/- with 8% interest within six weeks.

H S Barad Vs State of Gujarat — Public Procurement and Tenders | Gujarat HC (2018)

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C/SCA/24265/2006 JUDGMENT

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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

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R/SPECIAL CIVIL APPLICATION NO. 24265 of 2006

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FOR APPROVAL AND SIGNATURE:

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HONOURABLE MR.JUSTICE BIREN VAISHNAV

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========================================================== 1 Whether Reporters of Local Papers may be allowed to see the judgment ?

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2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ?

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4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India or any order made thereunder ?

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========================================================== H S BARAD Versus STATE OF GUJARAT

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==========================================================

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Appearance:

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ADVOCATE NOTICE SERVED(81) for the PETITIONER(s) No. 1 MR ANAND L SHARMA(1714) for the PETITIONER(s) No. 1 MR. KANVA. M. ANTANI, ASSISTANT GOVERNMENT PLEADER(1) for the RESPONDENT(s) No. 1,2

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==========================================================

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CORAM: HONOURABLE MR.JUSTICE BIREN VAISHNAV

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Date : 01/11/2018

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ORAL JUDGMENT

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1 The present petition has been filed by the petitioner, claiming the following reliefs:

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C/SCA/24265/2006 JUDGMENT

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“17. (A) Directing the respondents to refund the amount of Rs.1,22,869/- with 8% interest.

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(B) During the pendency and final disposal of this petition, Respondents may be directed to refund the amount of Rs.1,22,869/-.”

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2 The facts giving rise to the petition are as under:

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2.1 The petitioner was working as a Sales Tax Officer, Class-II, in the State Government. He retired on superannuation on 30.10.2003. On superannuation, he was paid terminal benefits after deducting an amount of Rs.1,08,722/-. The petitioner was initially appointed as a Clerk on 01.11.1964. He was subsequently promoted as Sales Tax Officer, Class-II, in the year 1998 till he retired from service. The petitioner was granted the first higher grade scale of Rs.2,000 – 3,500/- with effect from 01.08.1990. This was so granted pursuant to the Government Resolution dated 05.07.1991.

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2.2 By an order dated 11.12.2001, such higher grade scale was withdrawn and recovery was ordered. It is the case of the petitioner that he paid an amount of Rs.14,147/- on 11.12.2001 and an amount of Rs.1,08,722/- on 10.03.2004 under protest. In all therefore, the petitioner paid an amount of Rs.1,22,869/-.

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2.3 It is the case of the petitioner that in an identical petition being Special Civil Application No. 6006 of 2002, this

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C/SCA/24265/2006 JUDGMENT

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Court set aside the recovery, and therefore, the petitioner is governed by this judgment. Even, the Letters Patent Appeal against the said judgment filed by the State was dismissed and the order stood confirmed up to the Supreme Court.

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3 Mr. Anand Sharma, learned advocate for the petitioner, contended that he has restricted this petition only to the limited extent of recovery. A specific statement is made in the petition in para 9, by which it is stated that the petitioner does not challenge the order cancelling the higher grade scale. Short argument that Mr.Sharma, learned advocate for the petitioner, has made is that no recovery could have been made because such benefit was granted not on account of any fraud or misrepresentation or wrong information given by the petitioner.

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3.1 Reliance is placed on Rule 57(A) and Rule 28 of the Gujarat Civil Services (Pay) Rules, 2002, which read as under:

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“28. Pay when promotion appointment is found to be erroneous : (1) Notwithstanding the provisions contained in these rules, the pay of a Government employee whose promotion or appointment to a post is found to be or to have been erroneous on the basis of facts, e.g. incorrect seniority, failure to apply any relevant rules or orders correctly, shall be regulated in accordance with the general or special orders issued by the Government this behalf.

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(2) Where any rule or order regulating pay is made with retrospective effect, the pay of a Government

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C/SCA/24265/2006 JUDGMENT

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employee affected by such order or rule, shall be fixed notionally as if the rule or order were applicable in his case but the Government employee concerned shall not be called upon to refund the resultant amount of overpayment on account of pay and allowances :

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Provided that in the case where the erroneous promotion or appointment was given on the basis of false information furnished by the concerned Government employee, the departmental action shall be taken against him and the resultant amount of overpayment on account of pay and allowances shall also be recovered from him.”

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3.2 Mr.Sharma, learned advocate for the petitioner, has relied on a decision of Hon’ble Supreme Court in the case of

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State of Punjab And Others vs. Rafiq Masih (White washer) And others., reported in (2015) 4 SCC 334. Reliance is placed on paragraph 18 thereof to contend that in view of the fact that employee has retired from services, recovery if made from retired employee, would be iniquitious or harsh. Para 18 of the judgment reads 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 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). (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

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C/SCA/24265/2006 JUDGMENT

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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.

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(v) In any other case, where the Court arrives at a conclusion, that recovery if made from the employee, would be iniquitious 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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4 As against that, Mr.Kanva Antani, learned AGP, has vehemently opposed granting of any relief in favour of the petitioner. Drawing my attention specifically to paragraph 4 of the affidavit-in-reply, Mr.Antani, learned AGP, has submitted that the petitioner was initially granted the benefit of higher grade scale on 07.11.1992. By a resolution dated 16.08.1994, the Scheme was ab initio modified. The petitioner was not entitled for higher grade scale as he got more than two promotions. He has drawn my attention specifically to the table of the affidavit-in-reply and suggested that since the petitioner had got more than two promotions as demonstrated, he was not entitled for the benefit of higher grade scale. The table of the affidavit-in-reply reads as under:

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Initiallyappointed as Clerk	Dt : 1/11/1965
Clerk selectiongrade	Dt : 1/3/1972
Senior clerk	Dt : 30/4/1973
Senior clerk selectiongrade	Dt : 22/12/1975
Sales Tax Inspector	Dt : 6/3/1976

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Page 5 of 9

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C/SCA/24265/2006 JUDGMENT

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4.1 He has also placed reliance on the judgment and order dated 18.07.1996 passed in Special Civil Application No. 9204 of 2005, wherein, this Court specifically did not entertain the prayer in similar situation for setting aside the recovery.

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4.2 Mr.Antani, learned AGP, has also drawn my attention to paragraph 6 and contended that, when the petitioner retired, he on his own volition paid the amount pursuant to the order of recovery and therefore once having acquiesced in the action, it is now not open for him to ask refund once having paid the amount with open eyes.

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4.3 In support of this submission, Mr.Antani, learned AGP, has relied on a decision of Hon’ble Supreme Court in the case of High Court of Punjab And Haryana and Ors. vs. Jagdev Singh, reported in (2016) 14 SCC 267, wherein, the Court has held that once an officer furnishes an undertaking, he is bound by such undertaking and cannot then say that he would not refund the amount. In his submission, the decision in the case of Rafiq Masih (supra), has been clearly distinguished in paragraph 11 of the said judgment. Para 11 of the judgment reads as under:

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“11. The principle enunciated in Proposition (ii) above cannot apply to a situation such as in the present case. In the present case, the officer to whom the payment was made in the first instance was clearly placed on

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notice that any payment found to have been made in excess would be required to be refunded. The officer furnished an undertaking while opting for the revised pay scale. He is bound by the undertaking.”

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5 Having considered the submissions of learned advocates appearing for the respective parties, it is clear that the petitioner was granted the benefit of the first higher grade scale by an order dated 07.11.1992. Nine years after the benefit was so granted, the respondent department unilaterally without even granting the petitioner an opportunity of hearing, withdrew the higher scale.

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5.1 Evident from the reply it is, that such withdrawal was on account of the fact that the petitioner was not entitled to the benefit as he had been given two promotions. In Mr.Antani’s submission, therefore, the fact that he was not entitled to the scale, made it evident that such withdrawal was justified that when the petitioner was not entitled to such a benefit, it was always open for the department to collect the excess payment.

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5.2 Be that as it may. It is evident from the facts on record that pay-scale which was granted in the year 1992 has been withdrawn nine years after the benefit was so granted. Assuming in favour of the department that the petitioner was not entitled to such benefit, the department could have corrected such a mistake earlier in point of time instead of

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C/SCA/24265/2006 JUDGMENT

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taking nine long years. This is squarely covered by the decision of the Hon’ble Supreme Court in the case of BSNL vs. BPL Mobile Cellular Ltd., reported in AIR (2008) SCW 6743.

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6 I am in agreement with Mr.Sharma’s submission that, the case squarely falls within the parameters laid down by the Hon’ble Supreme Court in the case of Rafiq Masih (supra). A retired employee cannot be made to refund an excess amount because it would certainly cause undue harassment to such an employee. This is particularly when he has accepted the fact that he is not challenging the reduction of pay. Recovery cannot be made on an amount for which he has not misrepresented or committed any fraud.

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7 As far as Mr.Antani’s submission that as in the case of Jagdev Singh (supra), since the petitioner had given an undertaking, he cannot challenge such recovery and claim refund is concerned, I am of the opinion that when a retired employee is faced with a situation to to opt for his terminal benefits only if he refunds part amount towards recovery, he is left with no choice but to surrender to the demand of the authority. This again, in any manner, goes against the

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C/SCA/24265/2006 JUDGMENT

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submission of Mr.Antani to challenge an action which is otherwise illegal, particularly when the same has been taken without even assemblance of following the principles of natural justice.

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8 In view of the aforesaid position, the petition is allowed. The respondents are directed to refund the amount of Rs.1,22,869/- to the petitioner. The same shall be refunded as expeditiously as possible with interest @ 8 % within a period of six weeks from the date of receipt of copy of this order. Rule is made absolute to the aforesaid extent.

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(BIREN VAISHNAV, J)

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Bimal

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H S Barad v. State of Gujarat

Case brief

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H S Barad v. State of Gujarat

Case brief

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