Dismissed

The Special Officer v. Mr.S.Kathiresan

Madras HC14 Oct 2014WA/1030/2012

Case brief

AI extract

What is this about?

The High Court dismissed writ appeals filed by a cooperative bank and Registrar challenging orders directing refund of excess salary amounts withheld from retiral benefits of retired Land Valuation Officers. The court held recovery barred in equity due to absence of fraud and passage of time, confirming the single judge's order.

What did the court decide?

Refund of withheld amounts from retiral benefits to the retired petitioners within six weeks.

The Special Officer Vs Mr.S.Kathiresan — Pension and Retirement Benefits | Madras HC (2014)

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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Dated : 14.10.2014

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CORAM

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THE HONOURABLE MR. JUSTICE N.PAUL VASANTHAKUMAR and THE HONOURABLE MR. JUSTICE P.R.SHIVAKUMAR

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W.A.Nos.1030/2012 and 1031/2012, W.P.Nos.4886 to 4888/2012, 17244 to 17247/2012 and 20361/2012 and M.P.Nos.1 of 2012 in W.A.Nos.1030 & 1031/2012 and M.P.Nos.1/2012 in W.P.Nos.17244 to 17247/2012 and 20361/2012 W.A.Nos.1030 and 1031 of 2012 1. The Special Officer Tamil Nadu Cooperative State Agricultural and Rural Development Bank Limited Mylapore Chennai - 600 004 2. Registrar of Cooperative Societies Kilpauk Chennai - 600 010 ...Appellants in both Appeals Vs. S.Kadiresan ...Respondent in W.A.No.1030/2012 N.Durairaj ...Respondent in W.A.No.1031/2012

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PRAYER: Writ Appeal under Clause 15 of the Letters Patent to set aside the order dated 15.06.2011 made in W.P.Nos.8135 and 3136 of 2009.

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W.P.No.8135 of 2009 and W.P.No.8136 of 2009:

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Petition filed under Article 226 of the Constitution of India, praying for issue a Writ of Certiorarified Mandamus, or any other https://hcservices.ecourts.gov.in/hcservices/ appropriate Writ(or) order or direction, in the nature of Writ,

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calling for the records pertaining to the order passed by the ist respondnet in his proceedings in Na.Ka. 127801/2008 VevuooVA 4 dated 16-12-2008 confirming the order passed by the 2nd respondent in his proceedings No. Estt/aCcts/Grafts/1001/ADO (201)/2002 (205)/2004 dated 12-07-2002 and quash the same and direct the respondents topay the reserved amount of RS.92,275.51 and 1,00,751.91 to the petitioner with interest @ 9% p.a. and pass such further or other order.

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For Appellants in : Mr.Karthik Mukundan both appeals

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For Respondent in : Mr.T.Sellapandian both appeals W.P.Nos.4886 to 4888 of 2012 P.Krishnan ...Petitioner in W.P.No.4886 S.Thirumalaikumar ...Petitioner in W.P.No.4887 C.Retnaswamy ...Petitioner in W.P.No.4888 Vs. 1. The Registrar of Cooperative Societies Kilpauk Chennai - 600 010 2. The Special Officer Tamil Nadu Cooperative State Agriculture and Rural Development Bank Limited Mylapore Chennai - 600 004 ...Respondents in all the WPs

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Prayer in W.P.No.4886/2012

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Writ Petition under Article 226 of the Constitution of India to issue a Writ of Certiorarified Mandamus, calling for the records pertaining to the order issued by the 2nd respondent in his proceedings No.Estt/Accts/Grats/1001/ADO(200)/2002 dated 05.01.2002, quash the same and consequently direct the respondents to pay the reserved amount of Rs.1,01,680.65 to the petitioner with interest at 9% per annum.

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Prayer in W.P.No.4887/2012

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Writ Petition under Article 226 of the Constitution of India to https://hcservices.ecourts.gov.in/hcservices/ issue a Writ of Certiorarified Mandamus, calling for the records

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pertaining to the order issued by the 2nd respondent in his proceedings No.Estt/Accts/Grats/1001/ADO(199)/2002 dated 02.11.2001, quash the same and consequently direct the respondents to pay the reserved amount of Rs.1,01,958.53 to the petitioner with interest at 9% per annum.

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Prayer in W.P.No.4888/2012

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Writ Petition under Article 226 of the Constitution of India to issue a Writ of Certiorarified Mandamus, calling for the records pertaining to the order issued by the 2nd respondent in his proceedings No.P.P./File-LVEO (Retd.)/06(1) dated 29.11.2006, quash the same and consequently direct the respondents to pay the reserved amount of Rs.1,02,686.60 to the petitioner with interest at 9% per annum.

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For Petitioners in : Mr.V.Kalayanaraman all the WPs for Aiyar & Dolia For Respondent in : Ms.P.Rajalakshmi, all the WPs Govt. Advocate for R1 Mr.Karthik Mukundan for R2 W.P.Nos.17244 to 17247 of 2012 and W.P.No.20361 of 2012 V.Pethanaraj ...Petitioner in W.P.No.17244 D.S.Janardhanam ...Petitioner in W.P.No.17245 S.Nagarajan ...Petitioner in W.P.No.17246 S.Kannan ...Petitioner in W.P.No.17247 S.Rajasekaran ...Petitioner in W.P.No.20361 Vs. 1. The Registrar of Cooperative Societies Kilpauk Chennai - 600 010 2. The Special Officer Tamil Nadu Cooperative State Agriculture and Rural Development Bank Limited New No.181 (Old No.79) Luz Church Road Mylapore Chennai - 600 004 ...Respondents in all the WPs

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https://hcservices.ecourts.gov.in/hcservices/

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Prayer in W.P.No.17244/2012

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Writ Petition under Article 226 of the Constitution of India to issue a Writ of Certiorarified Mandamus, calling for the records pertaining to the recovery made by the 2nd respondent and communicated in his proceedings dated 02.04.2012 bearing reference No.Na.Ka.7/RED/Tha.Pe.U.Sa/2011 and quash the same and consequently direct the respondents to return and pay the reserved amount of Rs.1,02,062.91 to the petitioner with interest at 12% per annum.

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Prayer in W.P.No.17245/2012

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Writ Petition under Article 226 of the Constitution of India to issue a Writ of Certiorarified Mandamus, calling for the records pertaining to the recovery made by the 2nd respondent and communicated in his proceedings dated 21.05.2004 bearing reference No.PER/P.F.28 (SG-LVEQ)/2004 and quash the same and consequently direct the respondents to return and pay the reserved amount of Rs.1,02,984.60 to the petitioner with interest at 12% per annum.

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Prayer in W.P.No.17246/2012

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Writ Petition under Article 226 of the Constitution of India to issue a Writ of Certiorarified Mandamus, calling for the records pertaining to the recovery made by the 2nd respondent and communicated in his proceedings dated 02.04.2012 bearing reference No.Na.Ka.7/RED/Tha.Pe.U.Sa/2011 and quash the same and consequently direct the respondents to return and pay the reserved amount of Rs.1,01,897.15 to the petitioner with interest at 12% per annum.

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Prayer in W.P.No.17247/2012

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Writ Petition under Article 226 of the Constitution of India to issue a Writ of Certiorarified Mandamus, calling for the records pertaining to the recovery made by the 2nd respondent and communicated in his proceedings dated 28.10.2004 bearing reference No.PER/P.F.22/ADO/04 and quash the same and consequently direct the respondents to return and pay the reserved amount of Rs.95,956.65 to the petitioner with interest at 12% per annum.

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Prayer in W.P.No.20361/2012

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Writ Petition under Article 226 of the Constitution of India to issue a Writ of Certiorarified Mandamus, calling for the records pertaining to the recovery made by the 2nd respondent in his communication dated 16.02.2007 and quash the same and consequently direct the respondents to return and pay the reserved amount of Rs.1,01,662.78 to the petitioner with interest at 12% per annum.

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https://hcservices.ecourts.gov.in/hcservices/

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For Petitioners in : Mr.V.Kalayanaraman all the WPs for Aiyar & Dolia For Respondent in : Ms.P.Rajalakshmi, all the WPs Govt. Advocate for R1 Mr.Karthik Mukundan for R2

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COMMON JUDGMENT & ORDER

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(Judgment was made by P.R.SHIVAKUMAR, J.)

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W.A.Nos.1030 and 1031 of 2012

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These writ appeals have been filed against the common order of the learned single Judge dated 15.06.2011 made in W.P.Nos.8135 and 8136 of 2009, filed for the issue of writ of certiorarified mandamus, to call for the records relating to the order of the 2nd appellant herein/first respondent in the writ petitions, made in his proceedings No.Na.Ka.127801/2008/VeUooVa.4, dated 16.12.2008, confirming the orders passed by the first appellant herein/second respondent in the writ petitions in his proceedings No.Estt/Accts/Grats/1001/ADO - (201)/2002 & (205)/2004 dated 12.07.2002 and 01.07.2004 respectively, withholding the excess payment made to wrong fixation of pay from their retiral benefits and quash the same and to direct the appellants herein to pay the amount withheld, namely a sum of Rs.92,275.51 and a sum of Rs.1,00,751.91 to the respondents in W.A.Nos.1030/2012 and 1031/2012 respectively, with an interest at the rate of 9% per annum.

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The respondent in W.A.No.1030 of 2011 initially joined the services of Primary Co-Operative Land Development Bank, Srivilliputtur on 02.05.1968 as clerk and subsequently he was promoted as supervisor and then as Grade I Supervisor. The respondent in W.A.No.1031 of 2011 initially joined as Supervisor in Primary Co-Operative Land Development Bank, Kovilpatti. Subsequently he was promoted as Gr.I Supervisor and then as Selection Grade supervisor. A decision was taken by the first appellant bank in the year 1984 to appoint the Senior Supervisors of the Primary Agricultural and Rural Development Banks throughout the State as Land Valuation Officers. Thus the respondents in the writ appeals were appointed as Land Valuation Officers with effect from 27.12.1984 in the scale of pay of Rs.525-25-775-30-1075-351215. The respondents in the appeals along with 34 such persons (totalling 36 persons) were similarly appointed as Land Valuation Officers with effect from 27.12.1984. Prior to the appointment of the respondents in the writ appeals as Land Valuation Officers, two earlier batches of officers were also appointed. The respondents in the appeals were drawing Rs.675/- as basic pay in their previous posts. But on being appointed as Land Valuation Officers, their https://hcservices.ecourts.gov.in/hcservices/ basic pay was fixed only at Rs.525/-. Hence, pointing out the

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anomaly, all the 36 persons of the third batch of Land Valuation Officers made a representation to the first appellant on 20.01.1986 and requested for revision of their pay. The said request was made pointing out fact that the Land Valuation Officers appointed in the previous batches were getting a higher basic pay of Rs.865/- and Rs.835/- respectively. Upon considering the said representation of the Land Valuation Officers of the third batch, the second appellant issued an order dated 04.04.1986 re-fixing their basic pay at Rs.625/- giving four increments in the time scale of pay of Rs.525-25-775-30-1075-35-1215. After such refixation, the first appellant bank was making payment of salary to the Valuation Officers of the third batch as per the said fitment. For about 12 years thereafter, a show cause notice came to be served on the respondents on 17.03.1997 for the recovery of the excess payment of salary made on the ground that they were not entitled to such higher pay. Similar show cause notices were also served on the other Land Valuation Officers of the 3rd batch. The said show cause notices came to be issued based on audit objections. Meanwhile the respondents retired on superannuation and orders adjusting excess payment made to them were passed by the first appellant on 12.07.2002 and 01.07.2004 respectively. The respondents submitted representation on 16.02.2008 praying for the removal of the audit objection based on which the excess payment was adjusted and withheld from the retiral benefits. Since no order was passed based on the said representation, the respondents approached this court with W.P.Nos.22596/2008 and 22597/2008 for a direction to the second appellant to consider the proposal said to have been submitted by the first appellant so as to remove the audit objections. This court, by order dated 17.09.2008, disposed of the said writ petitions directing the second appellant to consider the representations of the respondents herein and pass orders on merits and in accordance with law. Thereafter, the second appellant passed the impugned order dated 16.12.2008 declining the request of the respondents for the release of the amount withheld from their retiral benefits. Challenging the said impugned order, the above said respondents in the writ appeals filed W.P.Nos.8135 and 8136/2009 contending that excess payment made due to wrong fixation of pay could not be recovered in the absence of any misrepresentation made or fraud played by them leading to the wrong fixation of their basic pay in the cadre of Land Valuation Officers.

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The writ petitions were resisted contending that the service rendered by the Supervisors in Primary Cooperative Land Development Banks could not be taken into account for fitment at appropriate stage in the time scale of pay of Land Valuation Officer under the first appellant bank. It was also contended that the third batch of Land Valuation Officers accepted the appointment as Land Valuation Officers in the first appellant bank only as a fresh appointment, specifically agreeing for the fixation of their pay at the lowest stage in the time scale of pay of Rs.525-25-775https://hcservices.ecourts.gov.in/hcservices/

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30-1075-35-1215; that therefore the subsequent re-fixation of their pay at a higher level giving four increments was erroneous and that hence the second respondent would be entitled to recover from such employees the excess payment made due to wrong fixation of pay.

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Before the learned single Judge, it was contended on behalf of the Land Valuation Officers of the third batch that almost all the officers either had retired or were at the verge of retirement; that recovery of the excess payment from their retiral benefits after a lapse of more than 12 years would not be equitable and that in similar cases the Hon'ble Supreme Court also held that such recovery after a long gap was not justifiable. In support of their contentions, the decision of the Hon'ble Apex Court made in Sahib Ram vs. State of Haryana reported in 1995 Supp (1) SCC 18, which was followed by a Full Bench of the Apex Court in Syed Abdul Qadir vs. State of Bihar (Supreme 1 (2009) 163) were relied on.

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The learned single Judge, after traversing the facts and also considering the applicability of the above ratio decidendi made in the above said judgments allowed the writ petitions with the following observation and direction:

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".....In such circumstances, after contrasting the case on hand with the one decided by the Apex Court in Sahib Ram's case followed by Syed Abdul Qadir's Case (both cited supra), it must be held that, when no misrepresentation or fraud has been made or played by the employees of the Government or its Agencies or Institutions like the respondent Bank while making requests for enhancement of monetary benefits, after considering the grievance regarding parity in pay with other equally placed persons, if the Bank finds justification in the claim and fixes the pay scale to remove the parity, the petitioners/beneficiaries cannot and should not be confronted with the impugned order for recovery based on audit objections particularly after lapse of a decade and at a crucial time when the employees concerned attained the age of superannuation. Therefore, in the light of the decisions of the Apex Court as cited above, this Court does not feel any restraint to interfere with the impugned orders by holding the same legally untenable while making it clear that the present order passed, in the peculiar facts, is applicable only to the petitioners and not to other persons. The Respondent-Bank is directed to refund the amount recovered from the petitioners within a period of six weeks from the date of receipt of a copy of this Order."

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https://hcservices.ecourts.gov.in/hcservices/

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Ultimately the second appellant bank was directed to refund the amount recovered from the respondents, within a period of six weeks from the date of receipt of a copy of the order of the learned singe Judge. The said order of the learned single Judge is challenged in these writ appeals.

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The learned counsel for the appellants relied on a judgment of the Hon'ble Supreme Court in Chandi Prasad Uniyal and Others vs. State of Uttarakhand and others reported in (2012) 8 SCC 417, wherein it had been held that excess salary paid to the employees due to irregular or wrong pay fixation can be recovered from such employees even though there was no misrepresentation or fraud committed by such employees. Our attention has also been drawn to the Full Bench jdugment of the Hon'ble Supreme Court in State of Punjab & Ors. vs. Rafiq Masih (white washer) reported in 2014 STPL (Web) 495 SC, wherein a reference to the Larger Bench had been made on the premise that the opinion expressed in Chandi Prasad Uniyal and Ors. v. State of Uttarakhand & Ors. reported in (2012) 8 SCC 417 was in conflict with the opinion expressed in Shyam Babu Verma and Ors. v. Union of India & Ors. reported in (1994) 2 SCC 521 and Sahib Ram Verma v. State of Haryana reported in (1995) Supp.1 SCC 18. The Larger Bench of the Apex Court held that the observations made by the Apex Court in exercise of its extraordinary powers under Article 142 of the Constititution of India shall be an order in respect of the particular facts and circumstances of the case and the same will not amount to a binding precedent and on the other hand, a decision/opinion rendered under Article 136 of the Constitution of India will be a binding precedent in accordance with Article 141 of the Constitution of India.

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The Apex Court in Syed Abdul Qadir and others vs. State of Bihar and others reported in 2009 (3) SCC 975, has held "recovery has generally been prohibited by courts, where there was no misrepresentation or fraud on the employee's part and excess payment has been made by applying a wrong principle or wrong interpretation of a rule/order". It has also been held that such relief is granted, not because employee has any right but because the court exercises its equity jurisdiction so as to avoid hardship to an employee, who is not at fault.

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In Shyam Babu Verma and others vs Union of India and others reported in 1994 (2) SCC 521, wherein the employees had been erroneously given higher pay since 1973 and their pay scale came to be reduced in 1984 on detection of the error, and the excess amount paid was sought to be recovered, a Larger Bench consisting of three judges of the Hon'ble Supreme Court, while upholding the reduction of the pay, the Hon’ble Supreme court held that the employees, who received higher scale of pay due to no fault of theirs, should not suffer recovery of excess amount already paid to them after a lapse https://hcservices.ecourts.gov.in/hcservices/ of 11 years.

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In Sahib Ram vs. State of Haryana and others reported in 1995 Supp (1) SC 18, the Apex Court expressed a view that State should be restrained from recovery of excess payment already made when such excess payment was made without there being any misrepresentation on the part of the employees. In those two cases, the absence of misrepresentation or fraud on the part of the employees was cited as a reason for restraining the State from effecting recovery of payment made in excess due to wrong construction or wrong fixation.

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However, in Chandi Prasad Uniyal and others vs. State of Uttarakhand and others reported in (2012) 8 SCC 417, the Hon'ble Supreme Court has made the following observation:

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"We are of the considered view, after going through the various judgments cited at the Bar, that this Court has not laid down any principle of law that only if there is misrepresentation or fraud on the part of the recipients of the money in getting the excess pay, the amount paid due to irregular/wrong fixation of pay be reocvered."

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The Hon'ble Supreme Court in the said case, pointing out that in Shyam Babu Verma's case cited supra, the three Judges Bench of the Supreme Court held that it would not be just and proper to recover the excess amount paid to the employees as there was a gap of about 11 years from the date of grant of higher scale of pay on wrong fixation and the date of reduction of the pay, has held therein that generally the excess payment made to the employees on irregular/wrong fixation of pay can be recovered, as there is no right conferred on the employees, who received such excess payments to retain the benefit and that in appropriate cases, when recovery is sought to be made after a long gap, it will cause undue hardship to the employees provided the employee had received it without knowledge that the amount was paid in excess of what he was/they were entitled to, cannot be attributed to such employee/s. The court in such individual cases, using the judicial discretion, may on the facts and circumstances of the particular case, refuse to grant the relief of recovery. The Hon'ble Supreme Court has opined in paragraph 13 of the judgment as follows:

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"13. 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 misinterpretation 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 were on https://hcservices.ecourts.gov.in/hcservices/ the verge of retirement or were occupying lower

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posts in the administrative hierarchy."

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On the assumption that the opinion expressed in Chandi Prasad Uniyal's case cited supra conflicts with the decisions rendered in Shyam Babu Verma's case and Sahib Ram's case cited supra, the question came to be referred to a Larger Bench of the Hon'ble Supreme Court in the case in State of Punjab & Ors. vs. Rafiq Masih (White Washer) reported in 2014 STPL(Web) 495 SC. The Larger Bench, after considering various judgments held that there is no conflict in those decisions and in fact even in Chandi Prasad Uniyal's case cites supra, it has not been held that under no circumstances, the court can bar the recovery of excess payment made due to mistake. From the said judgments, the law laid down by the Supreme Court can be deduced as follows:

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i) As a general rule, excess payment made due to mistake or irregular/wrong fixation of pay shall always be recoverable;

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ii) There is no general Rule that recovery of excess payment made due to irregular or wrong fixation of pay, can be made only if there is misrepresentation or fraud on the part of the employees;

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iii) In exceptional cases, applying equity, the court can refuse permission to recover the excess payment;

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iv) In such exceptional cases, there should not be any misrepresentation or fraud and that the recipient should not have received excess payment with the knowledge that the amount was paid due to mistake or wrong fixation; and

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v) Recovery sought to be made after a long gap can also be taken as a ground for

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refusing permission for such recovery on equitable grounds using the discretion of the court.

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Applying the above said principles to the case on hand, we do not find any mistake or defect in the order of the learned single Judge in granting the relief prayed for in the writ petitions in W.P.Nos.8135 and 8136 of 2009. The learned single Judge has granted the relief noticing the fact that there was no misrepresentation or fraud on the part of the Land Valuation Officers; that their claim for re-fixation on par with similarly placed persons, namely Land Valuation Officers of 1st and 2nd Batches could not be said to be malafide; that there was a long gap and the recovery was sought to be made, when most of the Land https://hcservices.ecourts.gov.in/hcservices/ Valuation Officers, were either had retired or were at the verge of

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the retirement and that the relief was granted in their favour in the special facts and circumstances of the case using the discretion of the court to do equity as a court of equity. Reference to the absence of misrepresentation or fraud on the part of the respondents in the appeal seems to have been made to show that their case cannot be excluded from the exceptional cases referred to in Chandi Prasad Uniyal's case cites upra. It is also admitted that no such recovery was sought to be made in respect of Land Valuation Officers of batch 1 and 2. Under such circumstances alone, the learned single Judge has rightly granted the relief holding that the case of the respondents in the appeals would fall under the exceptional category contemplated in Chandi Prasad Uniyal's case cited supra and and we see no reason to interfere with the same and the writ appeals bound to fail.

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W.P.Nos.4886 to 4888 of 2012, W.P.Nos.17244 to 17247 of 2012 and W.P.No.20361 of 2012

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The cases of the petitioners in these writ petitions are similar to the case of the respondents in W.A.Nos.1030 and 1031 of 2012. In view of the orders passed in W.A.Nos.1030 and 1031 of 2012, these writ petitions are disposed of with similar directions as the one issued in the order of the learned single Judge dated 15.06.2011 made in W.P.Nos.8135 and 8136 of 2009, which we have confirmed in the above writ appeals.

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In the result, W.A.Nos.1030 and 1031 of 2012 are dismissed, confirming the order of the learned singe Judge dated 15.06.2011 made in W.P.Nos.8135 and 3136 of 2009. W.P.Nos.4886, 4887, 4888, 17244, 17245, 17246, 17247 and 20361 of 2012 are disposed of directing the first respondent in these writ petitions, namely the Registrar of Cooperative Societies, Kilpauk, Chennai - 10, to refund the amount recovered/withheld from the retiral benefits of the petitioners, within a period of six weeks from the date of receipt of a copy of this order. No costs. Consequently, all the connected miscellaneous petitions are closed.

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Sd/-

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Assistant Registrar(CO)

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//True Copy//

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Sub Assistant Registrar

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https://hcservices.ecourts.gov.in/hcservices/ asr

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The Registrar of Cooperative Societies
Kilpauk
Chennai - 600 010
2. The Special Officer
Tamil Nadu Cooperative State Agriculture
and Rural Development Bank Limited
New No.181 (Old No.79) Luz Church Road
Mylapore
Chennai - 600 004
2 CCs to Mr.T.Sellapandian, Advocate SR.No. 4952
2 CCs to Mr.Karthik Mukundan & Neelakandan, Advocate SR.No. 49464
1 CC to M/s. Aiyar & Dolia, Advocate SR.No. 49702 to 49705
1 CC to the Government Pleader, SR.No. 49229
W.A.Nos.1030&1031/2012,
W.P.Nos.4886 to 4888/2012,
W.P.Nos.17244 to 17247/2012
and W.P.No.20361/2012
and Connected MPs
KKI (CO)
PSI (31.10.2014)

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https://hcservices.ecourts.gov.in/hcservices/

The Special Officer v. Mr.S.Kathiresan

Case brief

What is this about?

What did the court decide?

The Special Officer v. Mr.S.Kathiresan

Case brief

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What did the court decide?

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