Allowed

Balak Ram v. State

Himachal Pradesh HC4 Mar 2011CWPOA/164/2008

Case brief

AI extract

What is this about?

The court quashed an order directing recovery of Rs. 13,392 as overpayment of retirement benefits. The countervailed notice was missing. Citing Supreme Court principles, the court held recovery barred due to lack of fraud, bona fide error by the department, and the long lapse of time since retirement.

What did the court decide?

Annexure A-11 dated 26.11.2007 directing recovery of Rs. 13,392 is quashed; proceedings closed.

Balak Ram Vs State — Pension and Retirement Benefits | Himachal Pradesh HC (2011)

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IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA.

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CWP (T) No. 164/2008

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Reserved on: 23.2.2011

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Decided on:4.3.2011

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Balak Ram Thakur.

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…Petitioner.

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Versus

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Secretary Home, Government of H.P. and others.

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…Respondents.

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_______________________________________________________

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Coram:

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Hon’ble Mr. Justice Rajiv Sharma, Judge.

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Whether approved for reporting?¹ Yes

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For the petitioner : Mr. Y.K. Thakur, Advocate.

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For the Respondents: Mr. Anshul Bansal, Addl. A.G. with Mr. P.M. Negi, Dy. Advocate General and Mr. R.P. Singh, Asstt. A.G. for respondents No. 1,2,4 and 5.

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Mr. Varun Chandel, Advocate vice Mr. Sandeep Sharma, Assistant Solicitor General of India for respondent No.3.

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None for respondent No.6.

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Justice Rajiv Sharma, Judge .

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Petitioner retired as Sub Inspector on 30.11.2003. His P.P.O. was prepared on 14.11.2003. However, vide office

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order dated 26.11.2007, a sum of Rs. 13,392/- was directed

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1 Whether reporters of the local papers may be allowed to see the judgment? Yes

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to be recovered, being over payment from his retiral benefits.

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Mr. Y.K. Thakur has strenuously argued that no notice has ever been issued to his client before the issuance of letter dated 26.11.2007 (Annexure A-11). He further argued that a sum of Rs. 13,392/- has been directed to be recovered from his retiral benefits belatedly on 26.11.2007. 3. Mr. P.M. Negi, learned Deputy Advocate General and Mr. Varun Chandel vice Mr. Sandeep Sharma, learned Assistant Solicitor General of India have strenuously argued that recoveries have been made since 32 days leave was not sanctioned with from 18.12.2000 to 18.1.2001.

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I have heard the learned counsel for the parties and have perused the pleadings carefully.

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Petitioner stood retired on 30.11.2003. His P.P.O., as noticed above, was prepared on 14.11.2003. Audit was carried out in the Department with effect from August, 2002 to June, 2003. ‘No Objection Certificate’ was issued in favour of the petitioner. However, it is only on the basis of second audit, which was carried out between 16.9.2004 to 22.9.2004, it transpired that the petitioner has been over paid a sum of Rs. 13,392/- since leave of 32 days

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was not sanctioned with effect from 18.12.2000 to 18.1.2001.

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Petitioner has not been issued any notice before the impugned order was issued on 26.11.2007. He was required to be given opportunity to explain his case before the respondents decided to recover a sum of Rs. 13,392/-. In the instant case, audit had already been conducted with effect from August, 2000 to June, 2003. Petitioner has neither misled nor misrepresented the respondents at the time when the payment was made to him for 32 days leave. He has suffered civil and evil consequences. Moreover, in the case in hand, we are dealing with the case of petitioner, who has retired on 30.11.2003 and has been asked to repay a sum of Rs. 13,392/- on 26.11.2007.

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Their Lordships of the Hon’ble Supreme Court in Syed Abdul Qadir and others versus State of Bihar and others , (2009) 3 SCC 475 have culled out the following principles governing the circumstances in which the excess amount cannot be recovered by the employer:

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“55. That apart, it also appears from the record produced before us that while the Finance Department of the Government of Bihar was in favour of making the amended provisions of FR. 22-C applicable to the appellants-teachers after having come to know that the said rule did not exist and had been substituted, the Department of Human Resource Development,

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Government of Bihar, wanted to apply the unamended provision to the appellants-teachers so as to make available the benefit of additional increment provided for under FR.22-C to its teachers, unaware of the fact that even under FR.22-C they were not entitled to the additional increment as they were not discharging duties and responsibilities of greater importance on the promoted post.

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56. This further goes on to show that the authorities in the State of Bihar were not even aware of the basic requirement for grant of additional increment and the decision appears to have been taken without proper application of mind. Otherwise, there was no reason for the Finance Department to state in the counter affidavit filed before the High Court that any affidavit filed on behalf of the Education Department may be ignored as Finance Department was the competent authority. In this very affidavit, the Finance Department while admitting that the pay fixation by the Education Department was wrong, stated as under:-

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"...the fixation of pay under Fundamental Rule 22C has wrongly been made as it was not in existence. Pay fixation on the basis of a nonexistent rule is a bona fide mistake."

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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 (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

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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 vs. State of Haryana, 1995 Supp. (1) SCC 18, Shyam Babu Verma vs. Union of India, [1994] 2 SCC 521; Union of India vs. M. Bhaskar, [1996] 4 SCC 416; V. Ganga Ram vs. Regional Jt., Director, [1997] 6 SCC 139; Col. B.J. Akkara [Retd.] vs. Government of India & Ors. (2006) 11 SCC 709; Purshottam Lal Das & Ors.,vs. State of Bihar, [2006] 11 SCC 492; Punjab National Bank & Ors. Vs. Manjeet Singh & Anr., [2006] 8 SCC 647; and Bihar State Electricity Board & Anr. Vs. Bijay Bahadur & Anr., [2000] 10 SCC 99.

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59. Undoubtedly, the excess amount that has been paid to the appellants - teachers was not because of any misrepresentation or fraud on their part and the appellants also had no knowledge that the amount that was being paid to them was more than what they were entitled to. It would not be out of place to mention here that the Finance Department had, in its counter affidavit, admitted that it was a bona fide mistake on their part. The excess payment made was the result of wrong interpretation of the rule that was applicable to them, for which the appellants cannot be held responsible. Rather, the whole confusion was because of inaction, negligence and carelessness of the officials concerned of the Government of Bihar. Learned counsel appearing on behalf of the appellants-teachers submitted that majority of the beneficiaries have either retired or are on the verge of it. Keeping in view the peculiar facts and circumstances of the case at hand and to avoid any hardship to the appellants-teachers, we are of the view

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that no recovery of the amount that has been paid in excess to the appellants-teachers should be made.

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60. Learned counsel also submitted that prior to the interim order passed by this Court on 7.4.2003 in the special leave petitions, whereby the order of recovery passed by the Division Bench of the High Court was stayed, some installments/amount had already been recovered from some of the teachers. Since we have directed that no recovery of the excess amount be made from the appellant- teachers and in order to maintain parity, it would be in the fitness of things that the amount that has been recovered from the teachers should be refunded to them.”

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Similarly, in Union of India and others versus

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R. Vasudev Murthy and others , (2010) 9 SCC 30 have held that it would be harsh and unreasonable to ask for refund after long lapse of time. Their Lordships have held as under:

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“21. We make it clear that if any of the employees have been given the benefit of the O.M. and payments have been made by the Union of India and/or Department of Telecommunication, it would not be entitled to recovery thereof from the Draughtsmen as it would be too harsh and unreasonable to ask for refund after such a long lapse of time.”

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Accordingly, in view of the observations and

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discussions made hereinabove, the petition is allowed. Annexure A-11 dated 26.11.2007 is quashed and set aside.

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In normal circumstances, liberty could be reserved to the respondents to proceed with the matter in accordance with

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law; however, since the petitioner has retired from service, proceedings are directed to be closed. There shall, however, be no order as to costs.

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(Rajiv Sharma), Judge

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4.3. 2011 awasthi

Balak Ram v. State

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Balak Ram v. State

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