Raghuraj vs Union Of India & Ors

Manish Garg, Member (J)

This Original Application has been filed by the applicant under Section 19 of Administrative Tribunals Act, 1985, seeking the following relief(s):

“(a) To declare the action of the respondents in recovery an amount of Rs. 1,11,276/- from the applicant as illegal and arbitrary. To stop recovery from immediate effect;

(b) To quash and set-aside the Impugned Order of recovery dated 14.11.2019;

(c) Direct the respondent to refund an amount of Rs. 2,262/- which is adjusted in the impugned order as was decided in earlier OA No. 4494/2018;

(d) To allow OA with exemplary costs;

(e) To pass such other direction or directions order or orders as this Hon’ble Tribunal may deem fit and proper to met the ends of justice.”

Brief facts of the case are that the applicant was appointed in the Northern Railway as Catering Khalasi (Catering Department) on 27.02.1995. He was selected for the post of Tech-III TL/Elect. Deptt. vide letter No.293 E/56/Elect./96/VII-P3 dated 12.03.2013 in the GP Rs. 5200-20200/-+ GP Rs.1900/- against 25% IQ quota. Subsequently, he was promoted, posting and pay fixation of Tech-I/TL/Elect Deptt. was issued vide letter No. 561 E/703/Restructuring of TL staff/Elect/P-3-2016 dated 10.04.2018 in the Gr. Rs.5200-20200/- + GP Rs.2400/-, wherein his name is mentioned at serial No.43 and his pay was fixed at Rs.32,900/-, whereas after the 7th Central Pay Commission, he was drawing Rs.36,500/- as a basic pay as per the letter No. 561E/703/Restruchring of TL staff/Elect/P-3-2016 dated 04.06.2018. However, after his promotion, a recovery was calculated from July 2008 to July 2018 vide letter No. 561-E/703/Restructuring of TL Staff/P-3/2016 dated 09.08.2018. Aggrieved, the applicant approached this Hon’ble Tribunal vide OA No. 4494/2018 and the recovery was stopped on the first date of hearing. The Department cancelled its letter No. 561 E/703/Restructuring of TL staff/Elect/P-3-2016 dated 04.06.2018 and letter No.561 E/703/Restructuring of TL staff/Elect/P-3-2016 dated 09.08.2018 and issued a fresh letter No. 729-E/62/98/P-3 dated 01.04.2019. After this, the department again sought recovery of an amount of Rs 1,12,746/- from the applicant after issue of new letter on the issue and adjusted an amount of Rs 23,262/- which they have already recovered from the applicant.

The applicant again approached this Tribunal vide OA No. 2588/2019 regarding recovery of an amount of Rs.1,12,746/- vide letter dated 04.06.2018. Deciding the same, on 30.08.2019, this Tribunal issued following direction:-

“2. At this stage, we direct the respondents to decide the representation dated 02.08.2019 preferred by the applicant within a period of two months from the date of receipt of a certified copy of this order. Till then, taking into consideration that the applicant is a group ‘C’ employee, the respondents are restrained from making any further recovery. There shall be no order as to costs.”

However, despite the aforesaid clear direction of this Tribunal, the respondents did not stop making recovery from the pay of the applicant. Aggrieved, the applicant preferred a Contempt Petition before this Tribunal against the said recovery initiated by the respondents. The same was closed by this Tribunal vide order dated 06.12.2019.

The present Original Application has been filed by the applicant challenging the impugned order dated 14.11.2019 passed by the respondents. The relevant paragraph of the same reads as under:-

“In reference to above, it is intimated that you were issued speaking orders vide this office of even No. dated 17.07.2019 (copy enclosed A-1) regarding excess payment drawn by you in terms of an in compliance to Hon’ble Tribunal CAT’s direction, in OA No. 4494/2018 orders dated 29.05.2019, the pay has been correctly been done in terms of RBE No. 72/2016 para 3 (i) & (iii) under PS no. 14579/2016 dated 08.07.2016 regarding recovery of wrongful/excess payment made to Government servants (copy enclosed A-2). Your representation dated 2.08.2019 replied vide this office letter No. even No. dated 7.10.2019 (copy enclosed A-3). As such your claim regarding return of amount recovery/revision of pay is not tenable. Your representation dated 02.08.2019 is hereby disposed of accordingly.”

Further, respondents have issued a letter No. 2016/F(E) II/6/3 dated 22.06.2016, which refers to the Recovery of wrongful/excess payments made to Government servants which regarding Office Memorandum of Ministry of Personnel, Public Grievances & Pensions, Department of Personnel & Training F. No. 18/03/2015-Estt. (pay-I) dated 2nd March 2016 which was issued after the decision of Hon’ble Supreme Court in the case of State of Punjab & Ors versus Rafiq Masih (White washer) etc in CA No. 11527 of 2014 which clearly states that recovery from Group “C’ employee cannot be made. In this OM, para 4 (i) states that no recovery from employees belonging to class–III and class-IV service (or Group ‘C’ and Group ‘D’ service) and the applicant falls in this category.

Learned counsel for the applicant submits that the case of the applicant is squarely covered by the aforesaid DOP&T’s OM F. No. 18/03/2015-Estt (Pay) dated 2nd March 2016, which was issued after the decision of the Hon’ble Supreme Court in the cases of State of Punjab & Ors versus Rafiq Masih (White washer) etc in CA No. 11527 of 2014 and Thomas Daniel versus State of Kerala in Civil Appeal No. 7115 of 2010 date 2nd May 2022 wherein it discussed the various cases which were earlier decided by the courts in detail.

Learned counsel for the respondents vehemently opposed the contentions raised by the applicant in the OA. He relies upon the counter affidavit and submits that the applicant was appointed as Catering Khalesi and promoted/regularised as Tech-III/TL in PB-I R Rs.5200-20200 GP 1900 against 25% IQ vide office letter No. 561-E/96/pt. VIII/P-3 dated 24.2.2014 and further promoted as Tech-II & Tech-I in PB-I Rs.5200-20200 GP Rs.2400/- & 2800/- respectively. Learned counsel for the respondents states that the applicant’s pay w.e.f. 01.07.2015 onward has been fixed correctly vide office letter of even no. dated 07.04.2019 replied vide office letter of even no. dated 07.10.2019. He has filed 1st OA No. 100/4494/2018 and 2nd OA No. 2588/2019. In both OAs, this Tribunal had directed to pass a reasoned and speaking order and the same were passed in compliance of that orders. He has again filed an OA No. 02/2020 regarding stoppage of recovery, which was correctly fixed, and in consequences of that, recovery was made as per Rly Board’s directive contained in PS No. 14579/2016 dated 08.07.2016. He further submits that the applicant’s pay has already been fixed correctly. Thus office letter of even no dated 07.04.2019 in consequence of which recovery was made as per Railway Board’s directive in PS No. 1479/2016 dated 08.07.2016 on the subject recovery of wrongful/excess payments made to Government Servants. In this regard, this Tribunal had already passed order dated 06.12.2019 in C.P. No. 449/2019 in O.A. No. 2588/2019 dated 06.12.2019.

Heard Mr. Ranbir Singh Sandhu, learned counsel for applicant and Mr. L. C. Singhi, learned counsel for respondents and perused the material on record. Learned counsel for the applicant had also filed his written submissions.

Learned counsel for applicant relied upon the judgment of Hon’ble Supreme Court in State of Punjab vs. Rafiq Masih, AIR 2015 SC 696 wherein it is held as follows:

“12. 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:

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

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

(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.

(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.”

Learned counsel for the applicant submitted that the impugned order is de hors the dictum of Hon’ble Supreme Court in Rafiq Masih (supra) as applicant was a Group-C employee. Therefore, recovery from the applicant is impermissible in law. It is the omission on the part of the respondents, which has created the present problem, leading to the present excess payment. The applicant is not at all responsible for the same. Learned counsel has also referred to the OM dated 02.03.2016 of the DOP&T which has been issued in view of the judgment of Hon’ble Supreme Court in the case of Rafiq Masih (supra).

After considering the rival contentions of the learned counsel for the parties and pleadings on record, this Tribunal is of the view that the issue involved in this case is squarely covered by the judgment of the Hon’ble Apex Court in Thomas Daniel vs. State of Kerala & ors., Civil Appeal No.7115/2010 dated 02.05.2022 wherein the Hon’ble Apex Court held as under:

“(9) 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.

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(12) In Syed Abdul Qadir and Others v. State of Bihar and Others, (2009) 3 SCC 475 59, 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 ordered, especially when the employee 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: 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 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 and Others v. Rafiq Masih (White Washer) and Others, (2015) 4 SCC 334 wherein this court examined the validity of an order passed by the State to recover the monetary gains wrongly 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 the employer and disallowed the 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 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.”

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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 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 facts of the present case as well as settled proposition of law as discussed above, the OA is allowed. Impugned order dated 14.11.2019 is quashed and any amount recovered pursuant to the said order dated 14.11.2019 may be refunded to the applicant within a period of two months from the date of receipt of a certified copy of this Order.

The OA is allowed in the aforesaid terms.

No order as to costs.