Dismissed

Pratap Singh Sharma v. State of Hp and Others

Himachal Pradesh HC11 Oct 2023CWP/2172/2023

Case brief

AI extract

What is this about?

The High Court of Himachal Pradesh disposed of multiple writ petitions challenging recovery of excess pay amount mandated for Class III employees after erroneous re-fixation. Relying on Rafiq Masih and subsequent precedents, the court held recovery is impermissible for lower-class employees after five years as it becomes iniquitous.

What did the court decide?

Respondents restrained from recovering excess amount; if recovered, amount must be refunded to petitioners within four weeks.

Pratap Singh Sharma Vs State of Hp and Others — Service and Employment | Himachal Pradesh HC (2023)

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IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA.

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CWP No. 6427 of 2022 with CWP Nos. 6831, 6810, 7196, 7236 of 2022, 1409, 4739 of 2023, 7046, 7049, 6821, 7330, 7025, 7329, 6751, 7451 of 2022, CWP No. 3853, 1665, 2172 of 2023, CWP No. 7572, 6787, 7485, 8086, 8186, 7486, 6814, 7214, 6820, 7616, 6562, 7068, 7164, 7262 and 7165 of 2022

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Decided on: October 11, 2023

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___ 1.	________________________ CWP No. 6427 of 2022 Nitya Nand Sharma State of Himachal Pradesh	___________ Versus and others	__________________ ……….. Petitioner(s) .. Respondents
2.	CWP No. 6831 of 2022 Rukmani Devi State of Himachal Pradesh	Versus and others	……….. Petitioner(s) .. Respondents
3.	CWP No. 6810 of 2022 Ram Lal		……….. Petitioner(s)
	State of Himachal Pradesh	Versus and others	.. Respondents
4.	CWP No. 7196 of 2022 Kundan Singh State of Himachal Pradesh	Versus and others	……….. Petitioner(s) .. Respondents
5.	CWP No. 7236 of 2022 Saroj Kumari State of Himachal Pradesh	Versus and others	……….. Petitioner(s) .. Respondents
6.	CWP No. 1409 of 2023 Kailash Sharma State of Himachal Pradesh	Versus and others	……….. Petitioner(s) .. Respondents
7.	CWP No. 4739 of 2023 Sunita Kumari State of Himachal Pradesh	Versus and others	……….. Petitioner(s) .. Respondents
8.	CWP No. 7046 of 2022 Purna Devi State of Himachal Pradesh	Versus and others	……….. Petitioner(s) .. Respondents

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9.	CWP No. 7049 of 2022 Ram Dassi Kaisth Versus State of Himachal Pradesh and others	……….. Petitioner(s) .. Respondents
10.	CWP No. 6821of 2022 Chander Prabha Versus State of Himachal Pradesh and others	……….. Petitioner(s) .. Respondents
11.	CWP No. 7330 of 2022 Yonten Negi Versus State of Himachal Pradesh and others	……….. Petitioner(s) .. Respondents
12.	CWP No. 7025 of 2022 Ramesh Chand Rathore Versus State of Himachal Pradesh and others	……….. Petitioner(s) .. Respondents
13.	CWP No. 7329 of 2022 Radha Chauhan Versus State of Himachal Pradesh and others	……….. Petitioner(s) .. Respondents
14.	CWP No. 6751 of 2022 Tashi Palmo Versus State of Himachal Pradesh and others	……….. Petitioner(s) .. Respondents
15.	CWP No. 7451 of 2022 Lok Pal Versus State of Himachal Pradesh and others	……….. Petitioner(s) .. Respondents
16.	CWP No. 3853 of 2023 Narvada Panta Versus State of Himachal Pradesh and others	……….. Petitioner(s) .. Respondents
17.	CWP No. 1665 of 2023 Meena Kanwar and another Versus State of Himachal Pradesh and others	……….. Petitioner(s) .. Respondents
18.	CWP No. 2172 of 2023 Pratap Singh Sharma Versus State of Himachal Pradesh and others	……….. Petitioner(s) .. Respondents

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19.	CWP No. 7572 of 2022 Ramesh Chand State of Himachal Pradesh	Versus and others	……….. Petitioner(s) .. Respondents
20.	CWP No. 6787 of 2022 Sunita Devi State of Himachal Pradesh	Versus and others	……….. Petitioner(s) .. Respondents
21.	CWP No. 7485 of 2022 Pawan Kumar State of Himachal Pradesh	Versus and others	……….. Petitioner(s) .. Respondents
22.	CWP No. 8086 of 2022 Anita Rathore State of Himachal Pradesh	Versus and others	……….. Petitioner(s) .. Respondents
23.	CWP No. 8186 of 2022 Narain Singh State of Himachal Pradesh	Versus and others	……….. Petitioner(s) .. Respondents
24.	CWP No. 7486 of 2022 Ramesh Kumar State of Himachal Pradesh	Versus and others	……….. Petitioner(s) .. Respondents
25.	CWP No. 6814 of 2022 Ram Singh Chauhan State of Himachal Pradesh	Versus and others	……….. Petitioner(s) .. Respondents
26.	CWP No. 7214 of 2022 Santosh Kumari State of Himachal Pradesh	Versus and others	……….. Petitioner(s) .. Respondents
27.	CWP No. 6820 of 2022 Kaushalya Sharma State of Himachal Pradesh	Versus and others	……….. Petitioner(s) .. Respondents
28.	CWP No. 7616 of 2022 Gautam Dev Bhardwaj State of Himachal Pradesh	Versus and others	……….. Petitioner(s) .. Respondents

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29.	CWP No. 6562 of 2022
	Mohan Lal Versus	……….. Petitioner(s)
	State of Himachal Pradesh and others	.. Respondents
30.	CWP No. 7068 of 2022 Bhadur Singh Versus	……….. Petitioner(s)
	State of Himachal Pradesh and others	.. Respondents
31.	CWP No. 7164 of 2022 Hari Dass Versus	……….. Petitioner(s)
	State of Himachal Pradesh and others	.. Respondents
32.	CWP No. 7262 of 2022 Shashi Kiran Versus	……….. Petitioner(s)
	State of Himachal Pradesh and others	.. Respondents
33.	CWP No. 7165 of 2022
	Jur Dassi Versus State of Himachal Pradesh and others	……….. Petitioner(s) .. Respondents

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________________________________________________________ Coram:

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Hon’ble Mr. Justice Sandeep Sharma, Judge. Whether approved for reporting?¹ Yes.

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For the Petitioners : Mr. Prem Pal Chauhan, Advocate, for the petitioners in CWP Nos. 6831, 6810, 7236 of 2022, 1409, 4739 of 2023, 7046, 7049, 6821, 7330, 7025, 7329, 6751 of 2022, CWP No. 1665, 2172 of 2023, CWP No. 7572, 6787, 8086, 6814, 7214, 6820, 7616, 6562, 7068, 7262 and 7165 of 2022 Mr. Raman Jamalta, Advocate, for the petitioners in CWP No. 3853 of 2023 Mr. Ashwani K. Sharma, Advocate, for the petitioners in CWP Nos. 7164, 7196, 7451, 7485, 7486 and 8186 of 2022.

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For the respondents : Mr. Anoop Rattan, Advocate General with Mr. Rajan Kahol, Mr. Vishal Panwar and Mr. B.C. Verma,

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

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Additional Advocates General & Mr. Ravi Chauhan and Ms. Sunaina, Deputy Advocates General.

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________________________________________________________ Sandeep Sharma, Judge (oral):

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Since the petitioners are aggrieved by same and similar action of the respondents, on account of issuance of communication dated 7.1.2022, by the Department of Health, Himachal Pradesh, all the petitions were clubbed together and now are being disposed of vide this common order. However, for the sake of clarity, facts and annexures of CWP No. 6427 of 2022, titled Nitya Nand Sharma v. State of Himachal Pradesh and others are being taken note herein below.

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For having birds’ eye view of the matter, facts, which are almost common in all the cases are that the petitioners herein were initially appointed as Male/Female Health Workers in the Health Department in the pay scale of Rs.950-1800 (pre-revised scale of Rs.400-600). 3. Since, persons appointed prior to the petitioners were in receipt of higher pay scale i.e. 510-940 (revised to 1365-2410 with effect from 1.1.19986 and again revised to Rs.4400-7000 with effect from 1.1.1996), petitioner herein approached this Court by way of CWP(T) No. 14085 of 2008 titled Suresh Rana v. State of Himachal Pradesh alongwith other petitions, which ultimately came to be decided vide judgment dated 20.4.2010 (Annexure P-2), whereby this court allowed the aforesaid petitions and struck down the cut-off date of 23.7.1990 being violative of Arts. 14 and 16 and directed respondents to release the pay scale of Rs. 1356-2410 from initial date of appointment and

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pay scale of Rs.4400-7000 with effect from 1.1.1996 alongwith interest at the rate of 9% per annum.

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Though, being aggrieved and dissatisfied with the judgment passed by Hon'ble Single Judge of this court, respondent-State filed an LPA before the Division Bench, but the same was dismissed. After dismissal of the LPA, respondent-State filed SLP(C) No.12544 of 2013 titled State of Himachal Pradesh and others v. Ravinder Kumar & Ors , which came to be decided vide order dated 1.5.2017 (Annexure P-3), whereby Hon'ble Apex Court held that impugned order of High Court in SLP(C) No. 12544 of 2013, dated 18.9.2012 in Jaya Devi Vs. State of Himachal Pradesh & Ors. in CWP No. 5754 of 2010, will apply to other cases also. In light of the aforesaid order passed by Hon'ble Apex Court, though judgment dated 20.4.2010 passed by Hon'ble Single Judge in Suresh Rana’s case remained intact, save and except the arrears, which were ordered to be restricted to three years prior to the date of filing of the petition.

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After passing of aforesaid order by Hon'ble Apex Court, Department by way of various orders passed in the year 2017, refixed the pay of the petitioners in the pay scale of Rs.1365-2410 as was actually received by their predecessors

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Now, pursuant to directions issued by Government of Himachal Pradesh vide order dated 7.1.2022, (Annexure R-7), respondent Department again revised the pay of the petitioners from Rs. 1365 to 1350 (Annexure P-1).

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Consequent upon aforesaid re-fixation, now the petitioners apprehend that the Department may initiate proceedings for recovering

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the amount allegedly received in excess by the petitioner pursuant to pay fixation done in his case vide order dated 22.8.2017 (Annexure P- 4).

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Pursuant to notices issued in the instant proceedings, respondents have filed reply, wherein facts, as have been noticed herein above, have not been disputed rather stand admitted. It has been stated by the respondents that pursuant to directions passed by this court, pay of petitioners, who were appointees of the year 1991 was to be fixed at Rs.1350 i.e. initial of revised pay scale of Rs. 13502410 corresponding pre-revised pay scale of Rs. 510-940 in the year 1991, with further subsequent benefits allowed from time to time including higher pay scale of Rs.1365-2410 as on 1.1.1993 and further revised from time to time, however, respondent No.4 Chief Medical Officer, while making re-fixation of pay with effect from the year 1991, vide communication dated 22.8.2017, Annexure P-4 erroneously fixed pay of the petitioner at Rs.1410, over and above the admissible pay of Rs.1350/-. As a result thereof, petitioners are in receipt of higher inadmissible pay, which is required to be recovered from them. It has been further stated by respondents that wrong and erroneous refixation of pay came to their notice in the year 2020 when case of pay anomaly of Devi Singh and Bimla Devi, Health Educators, at par with other counterparts working as Multi Purpose Health Worker, was received in the office of respondents.

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Having heard learned counsel for the parties and perused the material available on record, this court finds that there is no dispute that pursuant to judgment dated 20.4.2010, passed in Suresh Rana’s

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case and others alongwith other similar cases, petitioners were required to be granted pay scale of Rs.1365-2410 with effect from their initial date of appointment and pay scale of Rs.4400-7000 with effect from 1.1.1996 but inadvertently the authority concerned, while refixing the pay with effect from 1991, erroneously fixed petitioners at higher pay of Rs.1410/-, over and above the due and admissible pay of Rs.1350/-

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Though, Mr. Prem P. Chauhan, Mr. Raman Jamlta and Mr. Ashwani K. Sharma, learned counsel appearing for the respective petitioners, vehemently argued that pay fixation done vide communication dated 22.8.2017, Annexure P-4 is strictly in terms of judgment passed by this court on 20.4.2010, which has attained finality upto Hon'ble Apex Court but having perused the aforesaid judgment in its entirety, there appear to be merit in the contention of Mr. Anoop Rattan, learned Advocate General that actually, in terms of judgment taken note herein above, pay of the petitioners, was required to be refixed at Rs.1350 and not Rs.1410.

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On account of wrong pay fixation done vide communication dated 22.8.2017, admittedly petitioners are in receipt of higher inadmissible pay and as such, no illegality can be said to have been committed by the respondents, while ordering refixation of the same in the cases of all the petitioners in terms of instructions dated 7.1.2022, pursuant to which various office orders refixing the pay of the petitioners, came to be issued.

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Next question which needs determination in cases at hand is

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that, “whether the amount received in excess on account of wrong pay

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re-fixation can be permitted to be recovered by the respondents after five years of such wrong pay fixation.

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Mr. Anoop Rattan, learned Advocate General, while justifying the impugned action of the respondents, vehemently argued that once, it is not in dispute that vide office order dated 22.8.2017, pay of the petitioners was wrongly refixed at higher level of Rs.1410/- and such fact came to the notice of the respondents in the year 2020, no illegality can be said to be committed by them, while ordering pay refixation. He submitted that though at this juncture there is nothing to suggest that the Department is contemplating to recover the amount but even otherwise, respondents are well within their right to recover the same, because, if same is permitted to be retained by the petitioners, that would amount to unjust enrichment. He further submitted that there is sufficient material available on record suggestive of the fact that while granting benefit of pay refixation vide order dated 22.8.2017, all the petitioners were put to caveat that in case subsequently, audit objection is raised or amount is found to be paid in excess, the same shall be recovered from them.

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Mr. Prem P. Chauhan, Mr. Raman Jamalta and Mr. Ashwani K. Sharma, learned counsel for the petitioners, argued that that at the time of grant of benefit of re-fixation vide communication dated 22.8.2017, petitioners were put to caveat that the amount paid in excess can be recovered but only in the circumstance, where audit objection is raised or recovery is effected within a period of five years. He submitted that there is nothing on record or in the reply that audit objection, if any, ever came to be raised by Audit party/office of

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Accountant General, Himachal Pradesh, with regard to excess payment, if any, made to the petitioners. Learned counsel for the petitioners further submitted that there is nothing on record to show that the amount in excess was paid on account of any misrepresentation on the part of the petitioners rather the same was received pursuant to order dated 22.8.2017 passed by respondents in compliance of judgment passed by this court, which has attained finality upto the Hon'ble Apex Court

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While inviting attention of this court to judgment passed by Hon'ble Apex Court in State of Punjab and others v. Rafiq Masih , (2015) 4 SCC 334,, learned counsel for the petitioners argued that recovery, if any, from class III and IV employees is totally impermissible in law, as such, respondents are restrained from effecting recovery on account of excess payment. He also invited attention of this court to judgment passed by Division Bench of this court in S.S. Chaudhary v. State of H.P. & Others , decided on 24.3.2022, wherein, Division Bench of this Court, having taken note of various judgments rendered from time to time, including Rafiq Masih , laid down certain parameters, whereby recovery by an employer would be impermissible from the employees. He submitted that in Rafiq Masih, Hon'ble Apex Court has held that the recovery on the basis of undertaking from the employee is to be confined to Class I and II (Group A and Group B) but definitely it cannot be effected from Class III and IV (Group C and D) employees.

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Mr. Anoop Rattan, learned Advocate General, while refuting submissions made on behalf of learned counsel for the petitioners,

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invited attention to judgment of Hon'ble Apex Court in Chandi Prasad Uniyal & Ors . v. State of Uttarakhand , Civil Appeal No. 5899 of 2012, decided on 17.8.2012 to state that any amount paid /received without authority of law, can be recovered, barring few exceptions of extreme hardships, but not as a matter of right. He submitted that since, in the cases at hand, it stands established that the petitioners were not entitled to the amount, which they erroneously received on account of re-fixation of pay, as such, they are liable to refund the amount.

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To explore the answer to the question formulated herein above, it would be apt to take note of judgment passed by Hon'ble Apex Court in Rafiq Masih supra

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“10. In view of the afore-stated constitutional mandate, equity and good conscience, in the matter of livelihood of the people of this country, has to be the basis of all governmental actions. An action of the State, ordering a recovery from an employee, would be in order, so long as it is not rendered iniquitous to the extent, that the action of recovery would be more unfair, more wrongful, more improper, and more unwarranted, than the corresponding right of the employer, to recover the amount. Or in other words, till such time as the recovery would have a harsh and arbitrary effect on the employee, it would be permissible in law. Orders passed in given situations repeatedly, even in exercise of the power vested in this Court under Article 142 of the Constitution of India, will disclose the parameters of the realm of an action of recovery (of an excess amount paid to an employee) which would breach the obligations of the State, to citizens of this country, and render the action arbitrary, and therefore, violative of the mandate contained in Article 14 of the Constitution of India.

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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,

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repeatedly and regularly set aside orders of recovery made on the expressed parameters.

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Reference may first of all be made to the decision in Syed Abdul Qadir v. State of Bihar, (2009) 3 SCC 475, wherein this Court recorded the following observation in paragraph 58:

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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, Shyam Babu Verma v. Union of India, (1994) 2 SCC 521, Union of India v. M. Bhaskar, (1996) 4 SCC 416, V. Ganga Ram v. Director, (1997) 6 SCC 139, Col. B.J. Akkara (Retd.) v. Govt. of India, (2006) 11 SCC 709, Purshottam Lal Das v. State of Bihar, (2006) 11 SCC 492, Punjab National Bank v. Manjeet Singh, (2006) 8 SCC 647 and Bihar SEB v. Bijay Bahadur, (2000) 10 SCC 99."(emphasis is ours)

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First and foremost, it is pertinent to note, that this Court in its judgment in Syed Abdul Qadir's case (supra) recognized, that the issue of recovery revolved on the action being iniquitous. Dealing with the subject of the action being iniquitous, it was sought to be concluded, that when the excess unauthorised payment is detected within a short period of time, it would be open for the employer to recover the same. Conversely, if the payment had been made for a long duration of time, it would be iniquitous to make any recovery. Interference because an action is iniquitous, must really be perceived as, interference because the action is arbitrary. 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

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variety of sundry expenses. Based on the above consideration, we are of the view, that if the mistake of making a wrongful payment is detected within five years, it would be open to the employer to recover the same. However, if the payment is made for a period in excess of five years, even though it would be open to the employer to correct the mistake, it would be extremely iniquitous and arbitrary to seek a refund of the payments mistakenly made to the employee.

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In this context, reference may also be made to the decision rendered by this Court in Shyam Babu Verma v. Union of India (1994) 2 SCC 521, wherein this Court observed as under:

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"11. Although we have held that the petitioners were entitled only to the pay scale of Rs 330-480 in terms of the recommendations of the Third Pay Commission w.e.f. January 1, 1973 and only after the period of 10 years, they became entitled to the pay scale of Rs 330-560 but as they have received the scale of Rs 330-560 since 1973 due to no fault of theirs and that scale is being reduced in the year 1984 with effect from January 1, 1973, it shall only be just and proper not to recover any excess amount which has already been paid to them. Accordingly, we direct that no steps should be taken to recover or to adjust any excess amount paid to the petitioners due to the fault of the respondents, the petitioners being in no way responsible for the same."(emphasis is ours)

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It is apparent, that in Shyam Babu Verma's case (supra), the higher payscale commenced to be paid erroneously in 1973. The same was sought to be recovered in 1984, i.e., after a period of 11 years. In the aforesaid circumstances, this Court felt that the recovery after several years of the implementation of the pay-scale would not be just and proper. We therefore hereby hold, recovery of excess payments discovered after five years would be iniquitous and arbitrary, and as such, violative of Article 14 of the Constitution of India.

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Examining a similar proposition, this Court in Col. B.J. Akkara v. Government of India, (2006) 11 SCC 709, observed as under:

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"28. Such relief, restraining back recovery of excess payment, is granted by courts not because of any right in the employees, but in equity, in exercise of judicial discretion to relieve the employees from the hardship that will be caused if recovery is implemented. A government servant, particularly one in the lower rungs of service would spend whatever emoluments he receives for the upkeep of his

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family. If he receives an excess payment for a long period, he would spend it, genuinely believing that he is entitled to it. As any subsequent action to recover the excess payment will cause undue hardship to him, relief is granted in that behalf. But where the employee had knowledge that the payment received was in excess of what was due or wrongly paid, or where the error is detected or corrected within a short time of wrong payment, courts will not grant relief against recovery. The matter being in the realm of judicial discretion, courts may on the facts and circumstances of any particular case refuse to grant such relief against recovery."(emphasis is ours)

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A perusal of the aforesaid observations made by this Court in Col. B.J. Akkara's case (supra) reveals a reiteration of the legal position recorded in the earlier judgments rendered by this Court, inasmuch as, it was again affirmed, that the right to recover would be sustainable so long as the same was not iniquitous or arbitrary. In the observation extracted above, this Court also recorded, that recovery from employees in lower rung of service, would result in extreme hardship to them. The apparent explanation for the aforesaid conclusion is, that employees in lower rung of service would spend their entire earnings in the upkeep and welfare of their family, and if such excess payment is allowed to be recovered from them, it would cause them far more hardship, than the reciprocal gains to the employer. We are therefore satisfied in concluding, that such recovery from employees belonging to the lower rungs (i.e., Class-III and Class-IV - sometimes denoted as Group 'C' and Group 'D') of service, should not be subjected to the ordeal of any recovery, even though they were beneficiaries of receiving higher emoluments, than were due to them. Such recovery would be iniquitous and arbitrary and therefore would also breach the mandate contained in Article 14 of the Constitution of India.

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This Court in Syed Abdul Qadir v. State of Bihar (supra) held as follows:

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"59. Undoubtedly, the excess amount that has been paid to the appellant 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 appellant 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

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hand and to avoid any hardship to the appellant teachers, we are of the view that no recovery of the amount that has been paid in excess to the appellant teachers should be made." (emphasis is ours)

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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 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.

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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:

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"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. The relaxation given was only as regards obtaining first or second class in the prescribed educational qualification but not relaxation in the educational qualification itself.

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Admittedly the appellant does not possess the required educational qualifications. Under the circumstances the appellant would not be entitled to the relaxation. The Principal erred in granting him the relaxation. Since the date of relaxation the appellant had been paid his salary on the revised scale. However, it is not on account of any misrepresentation made by the appellant that the benefit of the higher pay scale was given to him but by wrong construction made by the Principal for which the appellant cannot be held to be at fault. Under the circumstances the amount paid till date may not be recovered from the appellant. The principle of equal pay for equal work would not apply to the scales prescribed by the University Grants Commission. The appeal is allowed partly without any order as to costs." (emphasis is ours)

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It would be pertinent to mention, that Librarians were equated with Lecturers, for the grant of the pay scale of Rs.700-1600. The above pay parity would extend to Librarians, subject to the condition that they possessed the prescribed minimum educational qualification (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, the degree of M.Lib. Science being a preferential qualification). For those Librarians appointed prior to 3.12.1972, the educational qualifications were relaxed. In Sahib Ram Verma's case (supra), a mistake was committed by wrongly extending to the appellants the revised pay scale, by relaxing the prescribed educational qualifications, even though the concerned appellants were ineligible for the same. The concerned appellants were held not eligible for the higher scale, by applying the principle of "equal pay for equal work". This Court, in the above circumstances, did not allow the recovery of the excess payment. This was apparently done because this Court felt that the employees were entitled to wages, for the post against which they had discharged their duties. In the above view of the matter, we are of the opinion, that it would be iniquitous and arbitrary for an employer to require an employee to refund the wages of a higher post, against which he had wrongfully been permitted to work, though he should have rightfully been required to work against an inferior post.

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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 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 Class-IV 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.

¶82

Careful perusal of aforesaid judgment clearly reveals that the judgment detailed herein above, came to be passed after passing of judgment dated 8.7.2013 by a three Judge Bench of Hon'ble Apex Court, wherein three judge bench, having taken note of divergent views/findings given by other Benches of Hon'ble Apex Court, in Shyam Babu Verma v. Union of India, (1994) 2 SCC 521, Sahib Ram v. State of Haryana, 1995 Supp(1) SCC 18 and Chandi Prasad Uniyal & Ors . v. State of Uttarakhand , Civil Appeal No. 5899 of 2012, decided on 17.8.2012 , … SCC 417, held that the observations made by this court in Rafiq Masih supra, not to recover excess amount paid to appellants in exercise of extraordinary jurisdiction under Art. 142 of the Constitution of India, which vests power in this court to pass equitable orders in the ends of justice.”

¶83

After answering aforesaid reference by three Judge Bench subsequent judgment dated 18.12.2014, in Rafiq Masih came to be passed, wherein Hon'ble Apex Court having taken note of all the aforesaid judgments including answer given by three Judge Bench

¶84

¶85

summarized certain situations, wherein recovery by employer would be impermissible in law, which have been already reproduced above.

¶86

No doubt, in Chandi Prasad Uniyal supra, on which heavy reliance was placed by learned Advocate General, held as under:

¶87

“14. We may point out that in Syed Abdul Qadir case such a direction was given keeping in view of the peculiar facts and circumstances of that case since the beneficiaries had either retired or were on the verge of retirement and so as to avoid any hardship to them.

¶88

We are not convinced that this Court in various judgments referred to hereinbefore has laid down any proposition of law that only if the State or its officials establish that there was misrepresentation or fraud on the part of the recipients of the excess pay, then only the amount paid could be recovered. On the other hand, most of the cases referred to hereinbefore turned on the peculiar facts and circumstances of those cases either because the recipients had retired or on the verge of retirement or were occupying lower posts in the administrative hierarchy.

¶89

In the aforesaid judgment, Hon'ble Apex Court categorically held that court is concerned with the excess payment of public money which is often described as “tax payers money” which belongs neither to the officers who have effected over-payment nor that of the recipients. Hon'ble Apex Court expressed their concern as to why the concept of fraud or misrepresentation as being brought in such situations. In nutshell in the aforesaid judgment, Hon'ble Apex Court held that in many situations without any authority of law, payments have been received by the recipients. Any amount paid/received without authority of law can always be recovered barring few exceptions of extreme hardships but not as a matter of right, in such situations law implies an

¶90

¶91

obligation on the payee to repay the money, otherwise it would amount to unjust enrichment.

¶92

True it is that in terms of aforesaid judgment passed by Hon'ble Apex Court, any amount paid/received without authority of law can always be recovered but not in all situations rather in cases of extreme hardships, employer can be restrained from effecting recovery.

¶93

Having taken note of Chandi Prasad Uniyal supra, Hon'ble Apex Court in its subsequent judgment dated 18.12.2014, passed in Rafiq Masih supra, detailed certain situations, wherein recovery would be impermissible in law. Having perused aforesaid situations detailed in para-18 of Rafiq Masih supra, this court is persuaded to agree with learned counsel for the petitioners that after passing judgment in Chandi Prasad Uniyal supra , Hon'ble Apex Court, culled out certain principles to determine extreme hardships and thereafter categorically formulated certain situations, wherein recoveries cannot be effected at all.

¶94

In Rafiq Masih supra, recovery from class III and IV employees have been held to be impermissible which in any situation cannot be effected.

¶95

Though Mr. Anoop Rattan, Advocate General argued that since undertaking was given by petitioners, at the time of refixation of their pay, that in the event of detection of excess amount ,they shall be liable to repay the same, judgment in Rafiq Masih, shall not apply in their case, but having perused para-18 of the judgment in Rafiq Masih , this court is not persuaded to agree with Mr.Anoop Rattan, learned Advocate General on two counts, firstly, recovery from Class III and IV

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¶97

employees is totally impermissible and secondly, recovery if any of excess amount cannot be made after five years.

¶98

In the cases at hand, admittedly refixation of pay in terms of judgment was done in the year 2017, whereas, order to correct the mistake which allegedly occurred in 2017 came to be passed in the year 2020 as a result whereof, sword is hanging over heads of petitioners of recovery.

¶99

Recently, Division Bench of this court, in S.S. Chaudhary supra, having taken note of various judgments passed by Hon'ble Apex Court including in Rafiq Masih , laid down certain situations, recovery would be impermissible from the employees. It would be apt to take note of following para of S.S. Chaudhary supra:

¶100

“35. In view of the aforesaid discussion, as held by Hon'ble Supreme Court in Rafiq Masih's case (supra), it is not possible to postulate all situations of hardship, where payments have mistakenly been made by the employer, yet in the following situations, recovery by the employer would be impermissible in law:-

¶101

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

¶102

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

¶103

(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.

¶104

(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.

¶105

(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.

¶106

(vi) Recovery on the basis of undertaking from the employees essentially has to be confined to Class I/Group-A and ClassII/Group-B, but even then, the Court may be required to see whether the recovery would be iniquitous, harsh or arbitrary to such an extent, as would far overweigh the equitable balance of the employer's right to recover.

¶107

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(vii) Recovery from the employees belonging to Class-III and Class-IV even on the basis of undertaking is impermissible.

¶109

(viii) The aforesaid categories of cases are by way of illustration and it may not be possible to lay down any precise, clearly defined, sufficiently channelised and inflexible guidelines or rigid formula and to give any exhaustive list of myriad kinds of cases. Therefore, each of such cases would be required to be decided on its own merit.”

¶110

In the aforesaid judgment Division Bench has clarified that recovery on the basis of undertaking from employees, essentially is to be confined to Class I and II employees (Group A and B) meaning thereby recovery is otherwise totally impermissible from Class III and IV employees. In the aforesaid Division Bench has decided that recovery though is permissible from employees of Class I and II (Group A and B) on account of undertaking but in case court comes to conclusion that same is iniquitous, harsh and arbitrary, it may intervene.

¶111

Hon'ble Apex Court in Thomas Daniel v. State of Kerala reported in [2022 SCC Online SC 536], taking note of Rafiq Masih , held the recovery from employees therein to be bad as the same was not due to any mis-representation or fraud by them, rather was the result of misinterpretation of the service rules and came to the notice of the employer on being pointed out by the office of Accountant General. Hon'ble Apex Court held as under:

¶112

“(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.”.

¶113

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Since in the cases at hand, all the petitioners are Class III employees and recovery is sought to be effected from of amount which was erroneously paid to them five years back, hence, this court is justified in exercising power under Art. 226 of the Constitution of India to interfere.

¶115

This court finds sufficient merit in all the petitions and the same are disposed of with the following directions:

¶116

(i) Though the orders of re-fixation of pay of the petitioners in the year 2022, thereby fixing the pay in the pay scale of 1350-2410, are upheld, but the respondents are directed not to make any recovery from the petitioners, on the basis of same.

¶117

(ii) Amount, if any recovered from the petitioner(s), shall be paid back to them forthwith, within four weeks from today.

¶118

All the petitions stand disposed of in the afore terms, alongwith all pending applications.

¶119

(Sandeep Sharma) Judge

¶120

October 11, 2023 Vikrant

Pratap Singh Sharma v. State of Hp and Others

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Pratap Singh Sharma v. State of Hp and Others

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