Girishchandra I. Shukla v. Ahmedabad Municipal Corporation
2016-08-19
ABHILASHA KUMARI
body2016
DigiLaw.ai
JUDGMENT : Abhilasha Kumari, J. 1. This petition under Article 226 of the Constitution of India has been preferred, challenging the action of the respondent Ahmedabad Municipal Corporation in effecting recovery of the excess interest amount from the retiral dues of the petitioner, vide a noting made on the balance-sheet dated 09.11.2009, prepared by the respondent Corporation. 2. The brief facts of the case are to the effect that the petitioner was appointed as a Clerk in the Class-IV cadre, on 01.10.1973. He attained age of superannuation on 31.10.2009. As per the statement made in the petition, during the entire tenure of his service, the petitioner has served diligently and faithfully. The petitioner had taken a loan of Rs. 2,800/- from his Provident Fund the year 1986, which was repaid in the year 1989. However, the corresponding entry regarding the re-payment of the loan was not made in the record of the respondent Corporation, due to which lapse, the petitioner suffered a loss to the tune of Rs. 7,000/-. However, this loan is not the subject-matter of the present petition. The petitioner had again taken a fresh loan to the tune of Rs. 8,500/- from his Provident Fund, on 10.08.1990. The same was to be returned in installments, starting from the next month. However, the respondent Corporation did not deduct the installments from the salary of the petitioner upto the year 1994-95. In the years 1994-95 and 1995-96, the respondent Corporation deducted the amounts of Rs. 5,100/- and Rs. 3,400/- from the salary of the petitioner by way of installments towards the loan of Rs. 8,500/-. The loan, therefore, stood repaid. It is the case of the petitioner that the necessary entries in the record of the respondent Corporation were not made at the relevant time, regarding the deduction of the loan amount, which led to its increase in the books of the respondent Corporation. At the time of retirement, the petitioner was entitled to receive Rs. 3,62,503/- towards his retiral dues. The grievance of the petitioner is that the respondent Corporation has deducted an amount of Rs. 56,149/- out of the said amount towards the recovery of the loan and extra interest accrued, without granting him an opportunity of hearing. Aggrieved by the above act of the respondent Corporation, the petitioner has approached this Court, by way of the present petition. 3. Mr.
56,149/- out of the said amount towards the recovery of the loan and extra interest accrued, without granting him an opportunity of hearing. Aggrieved by the above act of the respondent Corporation, the petitioner has approached this Court, by way of the present petition. 3. Mr. R.D. Makwana, learned advocate for the petitioner has submitted that, the action of the respondents in deducting the amount of Rs. 56,149/- from the retiral dues of the petitioner is arbitrary and unjust, especially as the amount of loan has already been deducted by the respondents in the years 1994-95 and 1995-96. Nothing further is due from the petitioner after the deduction of the said amount. 3.1 It is further submitted that the petitioner has not indulged in any misrepresentation or fraud. Nor has he refused to repay the loan. Instead, it was in the hands of the respondent Corporation to deduct the amount in installments, which they have done. The deduction of a huge amount at the fag end of the petitioner's career would put him in great financial hardship, especially as it has been done in violation of the principles of natural justice. 3.2 On the above grounds, it is prayed that the petition be allowed. 3.3 Learned counsel for the petitioner has placed reliance upon the judgment of the Supreme Court in the case of State of Punjab and others Vs. Rafiq Masih (White Waster) and others reported in (2015) 4 SCC 334 , in support of the above submissions. 4. Mr. H.S. Munshaw, learned advocate for the respondent Corporation has submitted that, the petitioner had taken a loan advance from his Provident Fund on 10.08.1990. It was to be repaid by-installments. Through inadvertence, the installments were not commenced with immediate effect. On realising the error, the respondent Corporation deducted Rs. 5,100/- and Rs. 3,400/- from the salary of the petitioner in the years 1994-95 and 1995-96, respectively. The second blunder committed by the respondent Corporation is that the amount of interest was not deducted. It is further submitted that the petitioner ought to have brought this aspect to the knowledge of the respondent Corporation, but he kept silent. At the time of the superannuation of the petitioner, it came to light that the above two errors had occurred, therefore, the recovery of Rs. 56,149/- has rightly been made from the retiral dues of the petitioner. 5.
At the time of the superannuation of the petitioner, it came to light that the above two errors had occurred, therefore, the recovery of Rs. 56,149/- has rightly been made from the retiral dues of the petitioner. 5. This Court has heard learned counsel for the respective parties, perused the averments made in the petition, contents of the affidavit-in-reply and other documents on record. 6. There is no dispute regarding the fact that the petitioner had taken a loan of Rs. 8,500/- from his Provident Fund. The respondent Corporation was to deduct the amount of loan through installments, with immediate effect. However, it did not do so immediately, but deducted the amount vide two installments of Rs. 5,100/- in the year 1994-95 and Rs. 3,400/- in the year 1995-96. After the deduction of this amount, the loan amount stood repaid. However, there appears to be some confusion regarding the deduction of the amount of interest, as is reflected in the affidavit-in-reply filed on behalf of the respondent Corporation. It is stated therein that some error/blunder was committed by its officers in doing so. How exactly the error has occurred and what blunder has been committed, does not clearly emerge from the said affidavit-in-reply. 7. The deduction of the amount of loan taken by the petitioner was in the hands of the respondent Corporation. It has admitted in the affidavit-in-reply that immediately, Rs. 5,100/- and Rs. 3,400/- were deducted from the salary of the petitioner in the years 1994-95 and 1995-96. If any further amount was outstanding, it was in the hands of the respondent Corporation to have deducted it in a similar fashion. This has not been done and it is evident that the loan amount stands repaid. In spite of this, at the fag end of his service when the petitioner received his retiral dues, he found that the respondent Corporation has deducted Rs. 56,149/- from his total retiral benefits of Rs. 3,62,503/-. 8. Admittedly, the deduction of this amount has been made by the respondent Corporation, without granting opportunity of hearing to the petitioner. This constitutes a violation of the principles of natural justice. 9. The petitioner has retired on a Class-III post. As seen from the record, his total retiral dues would have been Rs. 3,62,503/-, which was not a very large amount, even in the year 2009 when the petitioner superannuated.
This constitutes a violation of the principles of natural justice. 9. The petitioner has retired on a Class-III post. As seen from the record, his total retiral dues would have been Rs. 3,62,503/-, which was not a very large amount, even in the year 2009 when the petitioner superannuated. It is not the case of the respondent Corporation that the petitioner indulged in fraud or misrepresentation in order to achieve any financial benefits. On the contrary, it was totally in the hands of the respondent Corporation to have deducted the amount due from the petitioner, which it has already done. It is not disputed that the accounts of the respondent Corporation are audited every year. Had there been any discrepancy, it would have been reflected in the Auditor's Report. However, there is no mention of any such audit note being made. The stand taken by the respondent Corporation in the affidavit-in-reply, to the effect that there was some "error" is not substantiated. 10. By deducting the amount of Rs. 56,149/- from the retiral dues of the petitioner without granting him an opportunity of hearing, the respondent Corporation has violated the principles of natural justice. This action has been taken unilaterally and arbitrarily, at the fag end of the petitioner's service. 11. The petitioner is in the evening of his life and would be hard-pressed to make both ends meet. In his declining years, the petitioner would be required to make financial arrangements for his personal and medical requirements. The petitioner has not committed any act that could justify the deduction of the amount by the respondents, out of the retiral dues. It has been stated in the affidavit-in-reply that the respondent Corporation has made an inadvertent 'blunder'. However, the exact nature of the blunder is not clear. There is nothing on record to justify the action of the respondent Corporation. 12. In the view of this Court, the case of the petitioner is covered by the judgment of the Supreme Court in the case of State of Punjab and others Vs. Rafiq Masih (White Waster) and others (supra) that has been relied upon by learned counsel for the petitioner. The relevant extract of the judgment is reproduced hereunder: "18.
12. In the view of this Court, the case of the petitioner is covered by the judgment of the Supreme Court in the case of State of Punjab and others Vs. Rafiq Masih (White Waster) and others (supra) that has been relied upon by learned counsel for the petitioner. The relevant extract of the judgment is reproduced hereunder: "18. 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 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." 13. The petitioner has retired from service on a Class-III post and the recovery has been effected at the time of his retirement, therefore, the petitioner is covered by Clauses-(i) and (ii) of Paragraph-18 of the above judgment. The petitioner is also covered by Paragraph-18(iii) of the judgment as the recovery has been made in the year 2009, on account of a loan taken in the year 1990. The financial difficulties faced by the petitioner on account of the recovery far outweigh the difficulty, if any, faced by the respondent Corporation, especially when it has failed to place on record any discrepancy in the audit reports justifying the recovery of the excess amount from the petitioner. 14.
The financial difficulties faced by the petitioner on account of the recovery far outweigh the difficulty, if any, faced by the respondent Corporation, especially when it has failed to place on record any discrepancy in the audit reports justifying the recovery of the excess amount from the petitioner. 14. The above discussion and the aforestated reasons, coupled with the principles of law enunciated by the Supreme Court in the case of State of Punjab and others Vs. Rafiq Masih (White Waster) and others (supra), necessitate the passing of the following order: The action of the respondent Corporation in recovering alleged excess interest amount of Rs. 56,149/- from the retiral dues of the petitioner, as per the noting made in the balance-sheet dated 09.11.2009, is quashed and set aside. The said amount shall be returned to the petitioner within a period of one month from the date of the receipt of a copy of this judgment. If the said amount is not paid within the period of time stipulated hereinabove, interest at the rate of 8% per annum shall be paid thereafter, till the actual payment of the amount. 15. The petition is allowed, in the above terms. Rule is made absolute, accordingly. There shall be no orders as to costs.