Prem Singh vs State Of Rajasthan And Others

Kuldeep Mathur, J

By way of the present writ petition, the petitioner prays for following reliefs:-

“by an appropriate writ, order or direction, record of the case may be called for and the writ petition filed by the petitioner may kindly be allowed with costs, the orders cancelling the benefit of selection grade may be quashed and set aside, the respondents may be directed to restore the benefit of selection grade and revise the pay scale of the petitioner, they may be directed to refund the amount so recovered from his salary while he was in service and the amount so recovered from gratuity at the time of making payment of pension benefits, the petitioner is also entitle for interest on delayed payment of pension benefits as he retired on 30.06.2012 and pension has been sanctioned in the month of March, 2013.”

Learned counsel for the petitioner submits that the petitioner was initially appointed on the post of Bull Attendant in the respondent-department w.e.f. 07.12.1970. The petitioner on completion of 09, 18 and 27 years of service, was conferred first, second and third selection grade respectively by the respondents in pursuance of notification dated 25.01.1992. He further submits that at the time of superannuation from service, a sum of Rs.3,30,798/- was recovered from the gratuity which was payable to the petitioner, on the ground that the third selection grade in the pay scale of Rs.4,000-6,000 was wrongly granted to him and as a consequence whereof, he had been paid excess amount during the period 25.01.1992 to 30.06.2012. He further submitted that the selection grades were conferred upon the petitioner by the respondents on their own, in lieu of the notification dated 25.01.1992 issued by the Government of Rajasthan without any misrepresentation or fraud on part of the petitioner.

Learned counsel for the petitioner urged that action of the respondents in recovering a sum of Rs.3,30,798/- from the gratuity payable to the petitioner on his superannuation from service, deserves to be declared illegal and arbitrary by this Court.

Per contra, learned counsel for the respondents submitted that petitioner cannot be allowed to enjoy the service benefits, for which he is otherwise, not entitled and if the service benefit has been extended mistakenly by the respondent department to the petitioner, then the same can be rectified subsequently by way of recovery.

The Hon’ble Supreme Court of India in the case of Thomas Daniel v. State of Kerala & Ors. reported in (2022) 0 AIR (SC) 2153 while dealing with the issue as to whether increments granted to an employee can be recovered on his retirement, was pleased to hold as under:

“This Court in a catena of decisions has consistently held that if the excess amount was not paid on account of any misrepresentation or fraud 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 payment of emoluments or allowances are not recoverable. This relief against the recovery is granted not because of any right of the employees but in equity, exercising judicial discretion to provide relief to the employees from the hardship that will be caused if the recovery is ordered. This Court has further held that if in a given case, it is proved that an employee had knowledge that the payment received was in excess of what was due or wrongly paid, or in cases where error is detected or corrected within a short time of wrong payment, the matter being in the realm of judicial discretion, the courts may on the facts and circumstances of any particular case order for recovery of amount paid in excess.”

In the case of State of Punjab v. Rafiq Masih (White Washer) reported in (2015) 4 SCC 334, the Hon’ble Supreme Court after considering various situations which may arise in the cases where payment in excess to the entitlement is made to an employee held as under:

“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 welfare State), the issue resolved would be in 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. xxx xxx xxx

It is not possible to postulate all situations of hardship which would govern employees on the issue of recovery, where payments have mistakenly been made by the employer, in excess of their entitlement. Be that as it may, based on the decisions referred to hereinabove, we may, as a ready reference, summarise the following few situations, wherein recoveries by the employers, would be impermissible in law:

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

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

(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.”

In view of the law laid down by the Hon’ble Supreme Court and the present facts of the case, it is safely concluded that recovery from the petitioner, who is a retired employee of the respondent department, cannot be permitted, particularly when there is no misrepresentation on his part or knowledge that the payment received was in excess of his entitlement.

In the result, the writ petition succeeds and is allowed.

The respondents are directed to refund the sum of Rs.3,30,798/- recovered from the gratuity payable to the petitioner on his superannuation forthwith along with interest @ 4% per annum.