The High Court
Case Details
CWP-19341-2003 - 1 - IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH 645 CWP-19341-2003 Date of decision: 07.04.2025 Surinder Singh Bedi State of Punjab and others Versus ....Petitioner ...Respondents CORAM: HON'BLE MR. JUSTICE AMAN CHAUDHARY Present:-
Legal Reasoning
***** Mr. Sunil Chadha, Senior Advocate with Mr. Tara Dutt, Advocate for the petitioner. Mr. Amarpreet Singh Bains, AAG, Punjab . ***** AMAN CHAUDHARY, J. (ORAL) 1. Prayer made in the present petition is for quashing the letters dated 11.09.2003 and 02.12.2003, whereby recovery was sought to be effected. 2. Learned counsel submits that petitioner, who was appointed on 09.01.1979 as Agricultural Inspector on adhoc basis through a selection process held by the Departmental Selection Committee, was granted scale of Rs.3000-4500 on account of having completed service of 8 years in the year 1991. He passed the Departmental Account Paper (with books) held on 24.06.1996. However, the aforesaid scale was sought to be recovered vide impugned orders dated 11.09.2003 and 02.12.2003, which the Division Bench vide order dated 12.12.2003 had stayed while admitting the petition. Reliance is placed to the judgment of the Hon’ble Supreme Court in Jogeshwar Sahoo and others vs. The District Judge, Cuttack and others , SLP (C) No(s). 5918-2024, decided on 04.04.2025, wherein it has been held that the recovery of excess emoluments or allowances, disbursed as a consequence of an erroneous computation of the same, ought not to be affected, such indulgence being granted as an equitable relief, extended HAMANT 2025.04.09 18:07 I attest to the accuracy and integrity of this document CWP-19341-2003 - 2 - solely to alleviate the hardship that might otherwise be caused by such recovery, especially to those retired, the relevant paras whereof read thus:- to the The issue appellants 10.05.2017. “7. The issue falling for our consideration is not about the legality of the retrospective promotion and the financial benefit for on granted consideration is whether recovery of the amount extended to the appellants while they were in service is justified after their retirement and that too without affording any opportunity of hearing. 8. The law in this regard has been settled by this Court in catena of judgments rendered time and again; 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 and V. Gangaram vs. Regional Jt. Director, (1997) 6 SCC 139 and in a recent decision in the matter of Thomas Daniel vs. State of Kerala & Ors., (2022) SCC online SC 536 . 9. This Court has consistently taken the view that if the excess amount was not paid on account of any misrepresentation or fraud on the part of the employee or 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, such excess payments of emoluments or allowances are not recoverable. It is held that such relief against the recovery is not because of any right of the employee but in equity, exercising judicial discretion to provide relief to the employee from the hardship that will be caused if the recovery is ordered. 10. In Thomas Daniel (supra), this Court has held thus in paras 10, 11, 12 and 13: “10. In Sahib Ram v. State of Haryana, this Court restrained recovery of payment which was given under the upgraded pay scale on account of wrong construction of relevant order by the authority concerned, without any misrepresentation on part of the employees. It was held thus: “5. 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 HAMANT 2025.04.09 18:07 I attest to the accuracy and integrity of this document CWP-19341-2003 - 3 - a is of an on for the made which wrong wrong recovery employee, rule/order, calculating subsequently the circular account of payment if Grants Commission. The appeal is allowed partly without any order as to costs.” 11. In Col. B.J. Akkara (Retd.) v. Government of India 2 this Court considered an identical question as under: “27. The last question to be considered is whether relief should be granted against the recovery of the excess wrong payments interpretation/understanding dated 7-6-1999. This Court has consistently granted relief of excess against of emoluments/allowances the from following conditions are fulfilled (vide Sahib Ram v. State of Haryana [1995 Supp (1) SCC 18 : 1995 SCC (L&S) 248], Shyam Babu Verma v. Union of India [(1994) 2 SCC 521 : 1994 SCC (L&S) 683 : (1994) 27 ATC 121], Union of India v. M. Bhaskar [(1996) 4 SCC 416 : 1996 SCC (L&S) 967] and V. Gangaram v. Regional Jt. Director [(1997) 6 SCC 139 : 1997 SCC (L&S) 1652]): (a) The excess payment was not made on account of any misrepresentation or fraud on the part of the employee. (b) Such excess payment was made by the employer by the principle applying pay/allowance or on the basis of a particular interpretation of be erroneous. 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 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. 29. On the same principle, pensioners can also seek a direction that wrong payments should not be recovered, as pensioners are in a more disadvantageous position when compared to in-service employees. Any attempt to recover excess wrong payment would cause undue hardship to them. any misrepresentation the excess payment. NPA was added to minimum pay, for purposes petitioners or not regard guilty to are in found fraud The of to HAMANT 2025.04.09 18:07 I attest to the accuracy and integrity of this document CWP-19341-2003 - 4 - the the not any shall when recover ordered, employee especially respondents of stepping up, due to a wrong understanding by the implementing departments. We are therefore of the view that excess payments made towards pension in pursuance of the circular dated 7-6-1999 till the issue of the clarificatory circular dated 11-9-2001. Insofar as any excess payment made after the circular dated 11-9-2001, obviously the Union of India will be entitled to recover the excess as the validity of the said circular has been upheld and as pensioners have been put on notice in regard to the wrong calculations earlier made.” 12. In Syed Abdul Qadir v. State of Bihar3 excess payment was sought to be recovered which was made to the appellants-teachers on account of mistake and wrong interpretation of prevailing Bihar Nationalised Secondary School (Service Conditions) Rules, 1983. The appellants therein contended that even if it were to be held that the appellants were not entitled to the benefit of additional increment on promotion, the excess amount should not be recovered from them, it having been paid without any misrepresentation or fraud on their part. The Court held that the appellants cannot be held responsible in such a situation and recovery of the excess payment should not be has subsequently retired. The court observed that in general parlance, recovery is prohibited by courts where there exists no misrepresentation or fraud on the part of the employee and when the excess payment has been made by applying a wrong interpretation/understanding of a Rule or Order. It was held thus: “59. Undoubtedly, the excess amount that has been paid to any was the 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 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.” 13. In State of Punjab v. Rafiq Masih , (2015) 4 SCC 334 wherein this court examined the validity of an order passed by the State to recover the monetary gains wrongly appellant teachers because not of HAMANT 2025.04.09 18:07 I attest to the accuracy and integrity of this document CWP-19341-2003 - 5 - be the the the and would State), welfare resolved employer disallowed extended to the beneficiary employees in excess of their entitlements without any fault or misrepresentation at the behest of the recipient. This Court considered situations of hardship caused to an employee, if recovery is directed to reimburse same, exempting the beneficiary employees from such recovery. It was held thus: “8. As between two parties, if a determination is rendered in favour of the party, which is the weaker of the two, without any serious detriment to the other (which is truly a in issue consonance with the concept of justice, which is assured to the citizens of India, even in the Preamble of the Constitution of India. The right to recover being pursued by the employer, will have to be compared, with the effect of the recovery on the employee concerned. If the effect of the recovery from the employee concerned would be, more unfair, more wrongful, more improper, and more unwarranted, than the corresponding right of the employer to recover the amount, then it would be iniquitous and arbitrary, to effect the recovery. In such a situation, the employee's right would outbalance, and therefore eclipse, the right of the employer to recover. Xxxxxxxxx 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 be the recoveries impermissible in law: (i) Recovery from the employees belonging to Class III and Class IV service (or Group C and Group D service). the (ii) employees who are due to retire within one year, of the order of recovery. (iii) Recovery from the employees, when the excess payment has been made for a period in excess of five years, before the order of recovery is issued. (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. (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.” employees, employers, Recovery retired would from the by or 11. In the case at hand, the appellants were working on the post of Stenographers when the subject illegal payment was made to them. It is not reflected in the record that such payment was HAMANT 2025.04.09 18:07 I attest to the accuracy and integrity of this document CWP-19341-2003 - 6 - to of on the any fraud account appellants or made misrepresentation by them. It seems, when the financial benefit was extended to the appellants by the District Judge, Cuttack, the same was subsequently not approved by the High Court which resulted in the subsequent order of recovery. It is also not in dispute that the payment was made in the year 2017 whereas the recovery was directed in the year 2023. However, in the meanwhile, the appellants have retired in the year 2020. It is also an admitted position that the appellants were not afforded any opportunity of hearing before issuing the order of recovery. The appellants superannuated on a ministerial post of Stenographer were admittedly not holding any gazetted post as such applying the principle enunciated by this Court in the above quoted judgment, the recovery is found unsustainable. 12. For the aforestated, we are of the considered view that the appeal deserves to be allowed. Accordingly, we allow the appeal and set aside the order of the High Court and in consequence the orders dated 12.09.2023 and 08.09.2023 by which the appellants were directed to deposit the excess drawn arrears are set aside. having 3. In the case at hand, the Division Bench made the interim order absolute on 03.02.2006, after hearing the learned counsel for the parties, finding there to be nothing on record to show that petitioner has misrepresented or obtained the benefit by concealment of any fact. 4. Despite best efforts the learned State counsel has not been able to dispute the factual position and draw out any distinctive aspects in the aforementioned judgment or cite any contrary law . 5. In view of the afore, t he present petition stands allowed and orders dated 11.09.2003 and 02.12.2003 are set aside. (AMAN CHAUDHARY) JUDGE 07.04.2025 Hemant Whether speaking/reasoned Whether reportable : : Yes / No Yes / No HAMANT 2025.04.09 18:07 I attest to the accuracy and integrity of this document