R.P. Meena vs The State of Madhya Pradesh

S.K. Gangele, J—Heard.

The petitioner has filed this petition against the order dated 26.09.2013 in regard to recovery of an amount of Rs. 1,72,150/- from the petitioner. The petitioner retired from the post of Surveyor after attaining the age of superannuation w.e.f. 31.07.2011. At the time of retirement, the pension of the petitioner was fixed of Rs. 8,350/- per month. After retirement, an objection was raised in regard to pay fixation of the petitioner and other Surveyors by the Finance Department. Consequently, the recovery from the pension of the petitioner has been ordered. The petitioner pleaded in this petition that the recovery was illegal, his pay was fixed in regard to his entitlement.

The respondents-State in connected writ petition No. 1160/15, filed the reply and contended that at the time of fixation of pay, it was obligatory on the part of the authorities to fix the pay of the petitioner and other surveyors notionally w.e.f. 01.01.1996 and actually they should have been granted the monetary benefit w.e.f. 01.04.2006, however, the benefit on account of pay fixation was accorded w.e.f. 1996. When the Finance Department raised the objection, the State issued a circular dated 15.5.2003, and the amount which was paid in excess to the petitioner was ordered to be recovered. The petitioner was working on a Class-III post. It is not necessary to decide the controversy about the entitlement of the petitioner of pay fixation and notional benefit w.e.f. 1996 or 1.4.2006, in view of the judgment passed by the Hon''ble Supreme Court in the case of State of Punjab Vs. Rafiq Masih, (2014) 10 SCJ 700 in which it has been held as under:-

(ii). Examining a similar proposition, this Court in Col. (Retd.) B.J. Akkara Vs. The Govt. of India and Others, (2007) 207 ELT 3 : (2006) 9 JT 125 : (2006) 10 SCALE 206 : (2006) 11 SCC 709 : (2007) 1 SCC(L&S) 529 : (2006) 7 SCR 58 Supp : (2007) 2 SLJ 8 : (2008) 11 STR 305 , observed as under:

"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."

(emphasis is ours)

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.

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

"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 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)

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.

The Supreme Court clearly held that if the payments have mistakenly be made by the employer recovery from the employee belonging to Class-III and Class IV and recovery from retired employees or employees who are due to retire within one year, of the order of recovery is not permissible hence, the petition is allowed. The order of recovery dated 26.09.2013 (Annexure-P-6) from the petitioner is hereby quashed. No order as to the costs.