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2005 DIGILAW 666 (KER)

Santhakumari P. J. v. State of Kerala, Rep. By the Chief Secretary,

2005-10-14

K.S.RADHAKRISHNAN, K.T.SANKARAN

body2005
Judgment :- K.S. Radhakrishnan, J. This matter has been placed before us on a reference by a learned single judge of this court in view of the conflicting views expressed by a learned single judge of this court in Rose v. State of Kerala (2004 (1) KLT 934) and by another learned single judge in Sivankutty Nair v. Secretary to Government (2005 (3) KLT 512). 2. The question posed is whether Government is entitled to recover the amount paid to an employee on account of wrong fixation of pay in a case where employee has not contributed to the whole mistake. Learned judge in Rose’s case, supra (2004 (1) KLT 934) rejected the plea that the Government is disabled from demanding the over payments. Learned judge held that if an officer is denied any benefits he has a right to insist for payment. Likewise, he owes a duty to pay back the excess received by him. The plea that amounts paid are appropriated and one may find it difficult to pay it back can only be a self serving argument and not equitable. We notice that though the decision in Rose’s case has been placed before the learned judge who decided Sivankutty Nair’s case, supra (2005 (3) KLT 512), the learned judge found no reason to follow the principle laid down therein and took the view that excess amount paid on account of wrong fixation of pay cannot be recovered unless the employee has in any way contributed to the mistake. Learned judge also distinguished the bench decision of this court in United India Insurance Co. Ltd. v. Roy (2005 (2) KLT 63). That was a case where amount was sought to be recovered since the payment was made by mistake contrary to the direction given by the General Insurance Company of India which is binding on all the insurance companies. Learned judge also placed reliance on the decision of the apex court in Union of India vs. Indian Railways SAS Staff Association and others (1995 Suppl. (3) S.C.C. 600). 3. Original petition was filed challenging the order of the Government dated 25.6.1997 whereby the Government rejected the petition challenging recovery of excess amount paid to the petitioner from the pensionary benefits. Petitioner was working as High School Assistant in S.V.V.H.S., Miyapadavu from 19.9.1967 and she attained the age of superannuation on 30.9.1993. (3) S.C.C. 600). 3. Original petition was filed challenging the order of the Government dated 25.6.1997 whereby the Government rejected the petition challenging recovery of excess amount paid to the petitioner from the pensionary benefits. Petitioner was working as High School Assistant in S.V.V.H.S., Miyapadavu from 19.9.1967 and she attained the age of superannuation on 30.9.1993. As per the provisions contained in the Kerala Service Rules, being a teaching staff petitioner was entitled to continue in service till the end of the academic year. Petitioner was not entitled to any leave except casual leave as per ruling No.2 of Rule 60 of Part I, K.S.R. Petitioner had applied for commuted leave for 9 days for the period from 9.12.1993 to 17.12.1993, vide application dated 3.12.1993. As per the provisions contained in the Kerala Service Rules, from the date of commencement of leave service of the petitioner would stand terminated. Accordingly Ext.P1 order was issued treating the petitioner retired from service with effect from 9.12.1993, date of availing of the leave. Later, pay of the petitioner was refixed as Rs.2,070/- with effect from 15.7.1993 and Rs.2,240/- with effect from 15.7.1994 and liability certificate showing the liability of Rs.16,297/- was issued being the irregular payment of pay and allowances from 09.12.1993 to 31.3.1994. Petitioner was liable to repay the excess amount drawn during the period 9.12.1993 to 31.3.1994. 4. Ruling No.2 of Rule 60 of Part I K.S.R. is a statutory provision binding not only on the departmental official who has paid the amount but also on the recipient of the amount. The said provision is extracted below for easy reference. “The teaching staff of educational institutions who are allowed to continue in service beyond the date of superannuation till the end of the academic year will not be eligible for any leave other than casual leave during the period of their service beyond the date of superannuatoin and if they apply for any leave other than casual leave during the period they shall be retired from service from the date of such application for leave.” Ruling No.2 specifically mentions that a teacher is entitled to take only casual leave during the extended period of service, otherwise the teaching staff shall be retired from service from the date of application of leave. Overlooking this statutory provision petitioner was allowed to draw excess amount due to a mistake. Overlooking this statutory provision petitioner was allowed to draw excess amount due to a mistake. Due to mistake if any amount is paid to an employee overlooking the statutory provision, employee should not have received the amount since employee is also equally bound by the statutory provision. Employee should have refused the payment since payment was effected contrary to a statutory provision. Public interest shall not suffer due to mistake committed by an officer who has paid the amount and the person who has received the amount. 5. In our view, if an employee has received any amount contrary to a statutory provision the mistake is mutual since the administration as well as the employee is bound by the statutory provision. Paying and receiving the amount contrary to the statutory provision is illegal. When a mistake is mutual that has to be shared by both the parties. Law would nullify such an action if the parties are mistaken on the same fact situation. In a case where the mistake is mutual, both the parties act on the same mistaken assumption. Person who pays the amount is on the legitimate belief that the person who receives the amount is entitled to receive it and the person who receives the amount is on the belief that he is entitled to receive the same. Mistake in such a situation, in our view, is mutual. Consequently same has to be set right in public interest unless there is statutory bar in recovering the amount. 6. Principle laid down by the learned judge in Sivankutty Nair’s case (2005 (3) KLT 512), in our view, cannot be of general application. Reasoning of the learned single judge that the excess amount paid on account of wrong fixation of pay cannot be recovered unless the employee has in any way contributed to the mistake, in our view, is an over statement of law. We may hasten to add, unless there is statutory bar in recovering the amount, any amount paid by mistake could be recovered depending upon the facts and circumstances of each case. To hold that only in a case where employee has contributed to the mistake amount could be recovered cannot be sustained. Facts situation may warrant a sympathetic consideration but cannot be accepted as a general principle of law. 7. A Division Bench of this court in United India Insurance Co. To hold that only in a case where employee has contributed to the mistake amount could be recovered cannot be sustained. Facts situation may warrant a sympathetic consideration but cannot be accepted as a general principle of law. 7. A Division Bench of this court in United India Insurance Co. Ltd. v. Roy (2005 (2) KLT 63) has held as follows: “To err is human; to correct an error is also human. ……. It is a large organization where several employees are working and large volume of work is being transacted. In such a situation, human error at times cannot be avoided. Nobody could expect an ideal situation without any error or mistake in the matter of administration. Due to inadvertence or otherwise a mistake has been committed which can always be corrected. Duty is cast not only on the administrators but on the beneficiary of the mistake to correct the error. The beneficiary is also part of the administration like the person who has committed the mistake.” We are of the view, in the instant case mistake is mutual and since both the Department as well as the employees are bound by the statutory rules and the decision in Indian Railways SAS Staff Association’s case is on different facts situation and is not applicable to the case where parties are bound by statutory rules. Petitioner is also not entitled to retain the money in equity. Lord Mansfield in Tower v. Barrett (1786) 1 TR 133 held: “I am a great friend of the action for money paid and received. It is a very beneficial action and founded on the principle of eternal justice.” Petitioner has been enriched by the receipt of a benefit and the enrichment is at the expense of public and retention of that pubic money is unjust. Person who receives government money has to keep it as a trustee and pay back the money if it is found that he keeps the money illegally. 8. In such circumstances, the reasoning of the leaned single judge in Sivankutty Nair’s case, supra (2005 (3) KLT 512) that unless the mistake is committed by the beneficiary the amount cannot be recovered is not a correct enunciation of law. We therefore hold that Sivankutty Nair’s case, has not been correctly decided. We answer the reference accordingly and uphold the reasoning of the learned single judge in Rose’s case. We therefore hold that Sivankutty Nair’s case, has not been correctly decided. We answer the reference accordingly and uphold the reasoning of the learned single judge in Rose’s case. Consequently the writ petition lacks merits and the same would stand dismissed.