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2008 DIGILAW 792 (PAT)

Union of India v. Nawal Kishore

2008-06-27

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ORDER 1. We heard the counsel for the parties. 2. The counsel for the petitioners invited our attention to the Full Bench decision of this court in the case of Ram Binod Singh and Others Vs. The Bihar State Electricity Board and Others, reported in 2007(3) PLJR 398 , wherein the Fur. Bench has observed thus: "26. The relevant provisions of the Indian Contract Act, particularly Section 72 cover cases of mistake of fact as well as law and provide for recovery. The principle of restitution in case of unjust enrichment is also an accepted principle for ensuring justice in appropriate case. Hence, in law, the position appears to be clear that there is no legal bar in ordering for recovery from retired employees where they have received money benefits on account of mistake at the ministerial level in the matter of fixation of pay grant of increments or time bound promotion when the conditions precedent for such promotions were clearly non est. However, it has been correctly submitted on behalf of the petitioners that the theory of simple mistake or error to justify, recovery will not hold good where the grant did not suffer from patent illegality or perversity so as to attract the Wednesbury Principle or the vice of mala fide in law. For example, where two interpretations of a provision were possible and one was consciously approved and adopted by the competent authority meant to be applied generally to all concerned, any error in such decision of the competent authority if corrected at a later stage may be ordered to apply only prospectively. Moreso, if the decision has been followed for many years. In other words, if on reinterpretation or adjudication the earlier view permitting the grant of monetary benefits is found to be by a competent authority and bona fide but wrong, mistaken or erroneous, then ordinarily no recovery should be made unless the excess payment already made is covered by the two exceptions pointed out in the case of Madan Mohan Prasad (supra). But if the grant was by way of undue favour, arbitrary, mala fide, ultra vires and/or void ab initio, recovery of public money should be the normal course. But if the grant was by way of undue favour, arbitrary, mala fide, ultra vires and/or void ab initio, recovery of public money should be the normal course. In such cases of clear disobedience of policy or rules by ministerial action or clear dishonest decision causing undue loss to public money, action against the concerned authority may also be justified to prevent and discourage plunder of public money by sheer disregard of clear law. The constitutional schemes of rule of law and fairness in public action support recovery in such cases unless law of limitation or waiver etc. are successfully invoked to show that they prevent such a course in the facts of any particular case. 27. Although judgments have been cited at the Bar from both the sides to highlight when an order or decision is void or voidable and relevant passage on this topic from the book-Administrative Law by H.W.R. Wade and C.G. Forsyth (Seventh Edition) has also been brought to notice of this Court, which runs as hereunder: "Void or voidable" was a distinction which could formerly be applied without difficulty to the basic distinction between action which was ultra vires and action which was liable to be quashed for error of law on the face of the record. That distinction no longer survives since the House of Lords declared all error of law to be ultra vires. But formerly an order vitiated merely by error of law on its face was intra vires and within jurisdiction, but liable to be quashed because of the exceptional powers of control which the courts established three centuries ago. Such an order was viodable, being intra vires and valid and effective, unless and until the court quashed it. Although Judges have suggested that these terms were borrowed from the law of contract and unsuited to admin)strative law, in fact, in their proper application, they are natural and apt." It is not desirable to enter into this controversy in the present matters. In Administrative Law what defects will render the decision wholly incapable of implementation since inception must be left to be decided in the facts and circumstances of each case in accordance with established principles of law. In Administrative Law what defects will render the decision wholly incapable of implementation since inception must be left to be decided in the facts and circumstances of each case in accordance with established principles of law. The principle that action which was ultra vires is void and action which was liable to be quashed for other errors is voidable can only serve as a guiding factor in deciding such a vexed issue in the facts of each case." 3. In the light of the statement of law expounded by the Full Bench of this court as noticed above, the view of the Tribunal that the excess payment made to an employee without there being any misrepresentation or inducement on the part of the employee cannot be recovered, does not seem to be correct. The Full Bench in the case of Ram Binod Singh considered all the three decisions in the cases of Mahendra Prasad, Gupteshwar Prasad and Sahib Ram noticed by the Tribunal. Mahendra Prasad and Gupteshwar Prasad are the decisions of this court, while Sahib Ram is the decision of the Supreme Court. In paragraph 25 of the report the Full Bench noticed that although in Sahib Ram it has been decided that no recovery was permitted even from a serving employee on the ground that higher pay scale was wrongly given for which an employee was not at fault, but in three other matters, the Supreme Court held otherwise. These matters being, Gangaram Vs. Regional Joint Director, AIR 1997 SC 2776 , State of Punjab Vs. Devinder Singh, (1998)9 SCC 595 and Union of India Vs. Sujatha Vedachalam (Smt.), (2000)9 SCC 187 . It was in the light of the three decisions of the Supreme Court in the cases of V. Gangaram, Devinder Singh and Sujatha Vedachalam (Smt.) the Full Bench took the view in paragraphs 26 and 27 of the report that we have noticed above. 4. Sujatha Vedachalam (Smt.), (2000)9 SCC 187 . It was in the light of the three decisions of the Supreme Court in the cases of V. Gangaram, Devinder Singh and Sujatha Vedachalam (Smt.) the Full Bench took the view in paragraphs 26 and 27 of the report that we have noticed above. 4. However, the counsel for the petitioners conceded that before an order of deduction/recovery could be passed, it was incumbent on the part of the petitioners to give notice to the respondent and that was not given and now since the notice is to be given to the respondent for the purpose of fixation of pay with regard to pensionary benefits, a notice shall also be given to the respondent asking him to show cause why the excess payment to the extent of Rs.50,044/- be not recovered. 5. In our considered view, since the recovery of a sum of Rs. 50,044/- from the amount of a gratuity without notice to the respondent was bad in law, the direction given by the Tribunal asking the present petitioners to repay the amount of Rs. 50,044/- with interest at the rate of 6 per cent per annum, does not call for any interference. However, it is clarified that it will be open to the petitioners to give notice to the respondent for recovery of alleged excess payment of Rs. 50,044/- and, after hearing, pass an appropriate order in that regard. We further observe that if ultimately it is found that because of wrong calculation or otherwise, an excess payment of Rs. 50,044/- was made to the respondent, the respondent would be liable to restitute that amount that may be paid or has been paid to the respondent consequent upon the decision of the Tribunal dated 31st January, 2007. 6. There is no challenge to the part of the order whereby the Tribunal has asked the present petitioners to pass a reasoned and speaking order regarding the fixation of pay for the purpose of pensionary benefits. 7. Writ petition is disposed of with the observations as noticed above.