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Judgment
Manish Garg, Member (J)
This Original Application has been filed by the applicants under Section 19 of Administrative Tribunals Act, 1985, seeking the following relief(s):
“(a) Quash and set aside order dated 22.11.2017/ wherein wrong fixation pay fixation has been done by the respondents.
(b) Direct the respondents to refund recovered amount from the applicants salary account.
(c) Any other relief, which this Hon’ble Tribunal may deem fit and proper in the circumstances of the case.”
Brief facts of the case are that the applicants, who were working as Beldars/khallasi with the DDA from 1977 onwards on work charge and muster roll basis were regularized in their respective posts. On transfer of DDA colonies to MCD, the applicants were transferred from DDA to MCD in the department named as “Delhi Water Supply and Sewage Disposal Undertaking” within the MCD on 01.06.1988 in the same post and same pay scale and as per the agreement agreed upon by the DDA and MCD. Clause 6 of the agreement is important for the purpose of the benefits given to the applicants/employees transferred from DDA to MCD or now Delhi Jal Board (DJB). DJB came into existence in the year 1998. As per the terms and conditions of Clause 6 of the agreement which lays down “every employee from the date of his transfer to the corporation shall become an employee of the corporation with such designation as the Commissioner may determine and shall hold office with same tenure, remuneration and on the same terms and conditions of service as he would have held if he had continued the service in DDA. The applicants had earlier filed OA No.480/2016 before this Tribunal titled Jagdish Chander and others vs. Delhi Jal Board and others and various other OAs before this Tribunal. Thereafter, the respondents passed internal office order vide which the applicants were granted grade pay of Rs.2800/-. However, respondents are now making recoveries from the salary of the applicants on the ground that they have wrongly fixed their salary. It is submitted that respondents are refixing the salary/grade pay of the applicants wherein even their basic pay is reduced.
The learned counsel for the respondent opposing the present OA has contended that applicant No.1 was transferred from DDA along with B.P.Stn. on 18.10.1985 to CSE MCD(48/C) then transferred to DJB. It is submitted that the respondent has never fixed the pay scale of the applicants in GP Rs.2800. They were granted 3% increment by the order of the Addl. CEO, Delhi Jal Board vide order dated 09.05.2016. Their pay was accordingly fixed. However, at the time of granting ACP/MACP to the staff transferred from DDA to DJB vide order dated 15.07.2017 the pay of the applicants was fixed with the condition that 3% increment given to applicants earlier will be recovered. It is further submitted that no amount has been recovered from applicant no.1 till date.
In support of their claim the applicants have relied on revised pay fixation order dated 08.12.2015 (Annexure A-1), copy of letter dated 09.05.2016 (Annexure A-2), copy of letter dated 15.06.2017 (Annexure A-3) and copy of revised pay fixation order dated 15.06.2017.
On above premises, it is not disputed that the excess payment was made due to a mistake accrued by way of wrong fixation of pay. The applicants are working as Beldars/ Khasllasi (Group D). They had initially filed OA No.480/2016 wherein respondent had passed internal order and applicants were granted grade pay 2800/-. The impugned order dated 22.11.2017 (Annexure A-1) has been passed without even issuing of show cause notice and without following principles of natural justice. The impugned order is loop sided and has been passed behind their back. The respondent authority has also ignored the office memorandum No.18/03/2015-Estt. (Pay-I) dated 02.03.2016. The relevant part of the order reads as under:
“5. The matter has, consequently, been examined in consultation with the Department of Expenditure and the Department of Legal Affairs. The Ministries or Department are advised to deal with the issue of wrongful/excess payments made to Government servants in accordance with above decision of the Hon’ble Supreme Court in CA No.11527 of 2011 (arising out of SLP (C) No.11684 of 2012) in State of Punjab and others etc. vs. Rafiq Masih (White Washer) etc. However, wherever the order of recovery in the above-mentioned situations is considered, the same may be viewed with the express approval of Department of Expenditure in terms of this Department’s OM No.18/26/2011-Estt.(Pay-I) dated 6th February, 2014.
In so far as persons serving in the Indian Audit and Accounts Department are concerned, these orders are issued with the concurrence of the Comptroller and Auditor General of India.”
Learned counsel for applicants relied upon recent judgment passed by the Hon’ble Apex Court in Civil Appeal No. 7115 of 2010 Thomas Daniel vs. State of Kerala & ors. dated 02.05.2022, wherein it is 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.
(10) In Sahib Ram v. State of Haryana and Others, 1995 Supp (1) SCC 18 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 Grants Commission. The appeal is allowed partly without any order as to costs.”
(11) In Col. B.J. Akkara (Retd.) v. Government of India and Others, (2006) 11 SCC 709 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 payments made on account of the wrong interpretation/understanding of the circular dated 7.6.1999. This Court has consistently granted relief against recovery of excess wrong payment of emoluments/allowances from an employee, if the 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 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 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.
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. The petitioners are not guilty of any misrepresentation or fraud in regard to the excess payment. NPA was added to minimum pay, for purposes of stepping up, due to a wrong understanding by the implementing departments. We are therefore of the view that the respondents shall not recover any 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 and Others v. State of Bihar and Others, (2009) 3 SCC 475 excess payment was sought to be recovered which was made to the appellantsteachers 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:
“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.”
(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.
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.”
It is also highlighted that similar view has been taken by the Hon’ble Apex Court in Civil Appeal No. 5527 OF 2022 titled as M.P. Medical Officers Association vs. The State of Madhya Pradesh & Ors. decided on 26.08.2022.
In view of the above facts and case laws, the case of the respondent is that excess payment was made due to a mistake accrued by way of wrong fixation of pay. The ratio of the Hon’ble Apex Court in the case of Thomas Daniel (supra) squarely applies to facts of the present case as the recovery has been made behind the back of the applicants without even issuing a show cause notice. Hence, this Tribunal is of the view that an attempt to recover the said increments after a passage of long lapse of time is unjustified.
In the result, the OA succeeds in part and is accordingly partly allowed. The impugned order dated 22.11.2017 is set-aside to the extent that no further recoveries shall be made pursuant to the interim orders passed by this Tribunal on 15.03.2018, which is hereby made absolute. There shall be no order as to costs.