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2022 DIGILAW 1725 (ALL)

Mohd. Janbaz Alam v. State Of U. P.

2022-11-02

VIKRAM D.CHAUHAN

body2022
JUDGMENT : 1. Heard learned counsel for the petitioner and learned Standing Counsel for the State-respondents. 2. It is submitted by learned counsel for the petitioner that the petitioner was working on the post of Junior Engineer under the respondents and has since retired on 30.06.2014 from the office of Executive Engineer, Rural Engineering Services, Gorakhpur. It is further submitted by learned counsel for the petitioner that a liability was fixed against the petitioner on the ground of excess payment of Rs. 99,856/-. The aforesaid liability is in respect of the year 2011-12 for construction of drain and road under Dr. Ambedkar project scheme for an estimate of Rs. 80.75 lakhs. Against the aforesaid estimated value, the financial and administrative approval was accorded to the tune of Rs. 56.15 lakhs and in pursuance thereof, a contract was executed on 12.09.2011. After completion of the contract, the total payment made was Rs. 55,49,856/-. The respondents have disputed the difference of amount of Rs. 99,856/- after taking measurement. The petitioner came to know about the aforesaid liability been fixed after his retirement thereafter the petitioner has moved an application before the Executive Engineer on 12.03.2016 giving details of circumstances in which the difference arisen and the amount should not be realised. It is further submitted that the petitioner has regularly represented the respondent authorities however the grievance of the petitioner was not decided and retirement dues after retirement of petitioner was not paid. After the retirement of the petitioner on 08.09.2016 another order was passed by the respondent No. 4 claming wrong fixation of promotional pay scale since 01.12.2008 and as such, the difference of amount of Rs. 3,10,022.00 was sought to be recovered. It is further submitted that thereafter on 02.05.2017, an order has been passed by the Additional Director, Treasury and pension, Varanasi Region, Varanasi directing adjustment of Rs.4,09,878/- from the retirement dues of the petitioner. By means of impugned order, adjustment of Rs. 4,09,878/- is being made from the retrial dues of the petitioner. It is further submitted that the petitioner submitted representation dated 13.04.2017 before the respondent authorities against the order dated 08.09.2016. Petitioner further filed a representation dated 01.04.2017 before the respondent authorities against the recover of Rs. 99,856.00 3. By means of impugned order, adjustment of Rs. 4,09,878/- is being made from the retrial dues of the petitioner. It is further submitted that the petitioner submitted representation dated 13.04.2017 before the respondent authorities against the order dated 08.09.2016. Petitioner further filed a representation dated 01.04.2017 before the respondent authorities against the recover of Rs. 99,856.00 3. It is further submitted by learned counsel for the petitioner that payment of excess salary was made in the year 2008 and aforesaid wrong fixation was not detected by the respondent and they have proceeded to initiate the recovery proceeding after retirement of the petitioner on 30.6.2014. It is further submitted that the retiral dues have been released, however now the amount is being adjusted from the pension. It is further submitted by learned counsel for the petitioner that neither the petitioner was in any manner involved in the fixation of third ACP nor any fraud or misrepresentation has been attributed to the petitioner in respect of wrong fixation. He has further submitted that the petitioner is entitled to protection in view of the law laid down by the Apex Court in State of Punjab and others Vs. Rafiq Masih (White Washer) (2015) 4 SCC 334 . 4. Learned Standing Counsel appearing on behalf of the State submits that financial and administrative approval was given for work to the tune of Rs. 60 lakhs by the Government. The Executive Engineer sanctioned Rs. 54.50 lakh for the work in question and as such, petitioner was authorised to make payment to the extent of Rs. 54.50 lakh, however, petitioner has made payment of Rs. 55,49,856.00/- and as such, a payment Rs. 99,856.00 has been excessively paid by the petitioner and the aforesaid amount is also sought to be recovered from the petitioner by impugned order. It is further submitted by learned Standing Counsel that the excess of salary paid and excess of payment made to the contract by the petitioner is sought to be recovered by means of the impugned order. Learned standing counsel do not dispute the fact that wrong fixation of salary was made in the year 2008 and the same was detected after retirement of the petitioner in the year 2014 and therefore, recovery is being made from the retiral dues. Learned standing counsel do not dispute the fact that wrong fixation of salary was made in the year 2008 and the same was detected after retirement of the petitioner in the year 2014 and therefore, recovery is being made from the retiral dues. He submits that the recovery is being made on the basis of consent letter submitted by the petitioner, which is at page 51 of the writ petition. On the aforesaid basis, learned Standing Counsel submits that once the petitioner himself has given consent for recovery then he cannot resile from his consent. 5. The service of employee is governed by the terms and condition provided in the service rules or otherwise. The salary and other financial benefits are provided by the employer to the employee after due sanction in accordance with law. The employee is entitled to financial benefits arising out of the service to the extent as may be permissible under the relevant service rules or the Government Orders issued from time to time. No employee has the indefensible right to obtain financial benefits in respect of service from his employer where the aforesaid financial benefits do not have the sanction of law. 6. In some cases employees are extended financial benefits in respect of the service which the said employees are not entitled under law. The financial benefits so extended may be by mistake of employer or by fraud or misrepresentation of the employee. The employee is entitled to receive the financial benefits including salary arising out of the service only to the extent as may be sanctioned by the employer in accordance. The employer is obliged to sanction these financial benefits to his employee in accordance with law. However, the difficulty may arise where on account of mistake of employer, financial benefits is extended to its employee which are not permissible under law. 7. Under the common law, a payment made by mistake is entitled to be recovered. The recovery of payment is based on the principle of enrichment. One should not unjustly profit at the expense of another. The said principle is also reflected under Section 72 of the Indian Contract Act, 1872. 8. In the present case, employer is the State and the action of the State is required to be in consonance with the Constitution. The action of the state is required to be just, fair and reasonable. The said principle is also reflected under Section 72 of the Indian Contract Act, 1872. 8. In the present case, employer is the State and the action of the State is required to be in consonance with the Constitution. The action of the state is required to be just, fair and reasonable. State action which is arbitrary and unfair, would not stand the concept of justice enshrined under the Constitution. 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 recovery of excess payment of financial benefits may visit the employee with greater hardship more particularly where the employee has retired from service. An employee would spend whatever emoluments he receives for the upkeep of his family. If he receives an excess financial benefits for a long period, he would spend it, genuinely believing that he is entitled to it as such any subsequent action to recover the excess payment will cause undue hardship to the employee. The State/Government is expected to reflect the constitutional mandate in all its action. The employer/State is under obligation to mitigate the hardship of the employee more particularly when the hardship arises out of the mistake of the employer. 9. The Apex Court in Rafiq Masih (supra) has recognised that the State action should be in consonance with the concept of justice enshrined in the Constitution. The Apex Court has further observed that 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. 10. The Apex Court in Rafiq Masih, (supra) has observed as under : “8. In such a situation, the employee's right would outbalance, and therefore eclipse, the right of the employer to recover. 10. The Apex Court in Rafiq Masih, (supra) has observed as under : “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 concerned employee. If the effect of the recovery from the concerned employee 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. 9. The doctrine of equality is a dynamic and evolving concept having many dimensions. The embodiment of the doctrine of equality can be found in Articles 14 to 18 contained in Part III of the Constitution of India, dealing with “fundamental rights”. These Articles of the Constitution, besides assuring equality before the law and equal protection of the laws; also disallow discrimination with the object of achieving equality, in matters of employment; abolish untouchability, to upgrade the social status of an ostracised section of the society; and extinguish titles, to scale down the status of a section of the society, with such appellations. The embodiment of the doctrine of equality, can also be found in Articles 38, 39, 39-A, 43 and 46 contained in Part IV of the Constitution of India, dealing with the “directive principles of State policy”. These Articles of the Constitution of India contain a mandate to the State requiring it to assure a social order providing justice-social, economic and political, by inter alia minimising monetary inequalities, and by securing the right to adequate means of livelihood, and by providing for adequate wages so as to ensure, an appropriate standard of life, and by promoting economic interests of the weaker sections. 10. 10. In view of the aforestated constitutional mandate, equity and good conscience in the matter of livelihood of the people of this country has to be the basis of all governmental actions. An action of the State, ordering a recovery from an employee, would be in order, so long as it is not rendered iniquitous to the extent that the action of recovery would be more unfair, more wrongful, more improper, and more unwarranted, than the corresponding right of the employer, to recover the amount. Or in other words, till such time as the recovery would have a harsh and arbitrary effect on the employee, it would be permissible in law. Orders passed in given situations repeatedly, even in exercise of the power vested in this Court under Article 142 of the Constitution of India, will disclose the parameters of the realm of an action of recovery (of an excess amount paid to an employee) which would breach the obligations of the State, to citizens of this country, and render the action arbitrary, and therefore, violative of the mandate contained in Article 14 of the Constitution of India.” 11. The employee under law has no right against recovery but in equity, exercising judicial discretion the recovery is disallowed to provide relief to the employees from the hardship that will be caused if the recovery is permitted. The said principle is recognised by Apex Court in judgement rendered on 2.5.2022 in Civil Appeal No.7115 of 2010 (Thomas Daniel Vs. State of Kerala and others) "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 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." 12. In Col. B.J. Akkara (Retd.) Vs. Government of India, (2006) 11 SCC 709 , Hon’ble Supreme Court has 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." 13. In the matter of recovery, it is well settled if certain payment has been made to the employee on account of any fault of the employer, and for which the employee is not responsible, namely, not guilty of fraud or misrepresentation, in such a case, the amount which has already been received by the employee and he has spent, should not be recovered. 14. 14. The Apex Court in Rafiq Masih (supra) has summarised some situations of hardship in which the payments made by mistake cannot be recovered. In this context paragraph 12 of the aforesaid judgment is quoted hereunder: “12. 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 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.” 15. Learned Standing Counsel has not disputed the proposition of law laid down in Rafiq Masih (supra) and Thomas Daniel (supra). It is submitted by learned Standing Counsel that recovery is being made on the strength of the consent of the petitioner, which is at page 51 of the writ petition. It is further submitted that by consent letter dated 08.07.2016 petitioner has permitted the employer to realise the amount. 16. It is not dispute between the parties that the petitiner is Class III employee and has retired 30.06.2014 and after his retirement, recovery is being made. The recovery of the amount of Rs. 4,09,878.00/- is being made from the petitioner. The aforesaid amount includes an amount of Rs. 99,856/- being an amount in excess paid by the petitioner to the contractor for executing the work contract. Further an amount of Rs. The recovery of the amount of Rs. 4,09,878.00/- is being made from the petitioner. The aforesaid amount includes an amount of Rs. 99,856/- being an amount in excess paid by the petitioner to the contractor for executing the work contract. Further an amount of Rs. 3,10,022/- is sought to be recovered on account of excess salary paid to the petitioner from 12.8.2008. It is to be noted that the petitioner has retired from service on 30.06.2014 and the order of recovery has been passed from the retiral dues of the petitioner on 08.09.2016. 17. The recovery of the aforesaid amount is being made on the strength of the fact that the excess payment has been made to the petitioner on account of incorrect fixation of salary by mistake and further that the petitioner has made excess payment to the contractor which the State had suffered loss. 18. Insofar as the loss suffered by the State on account of excess payment made by the petitioner to the tune of Rs. 99,856/- . to the contractor for the work contract executed, such a loss is alleged to be suffered by the State is of the year 2011-12 when the petitioner was in service. After the retirement when the petitioner came to know with regard to the aforesaid recovery been made from the petitioner, the petitioner by means of application dated 12.03.2016 filed objection to the aforesaid recovery explaining that the amount has been paid to the contractor as is permissible under law. The objection raised by the petitioner against the aforesaid recovery of excess payment made to the contractor was not decided by the employer and as such reminder dated 20.03.2016 was sent to the Executive Engineer. 19. Thereafter on 31.03.2016, respondent No.3 forwarded a letter to respondent No.4 directing that the representation of the petitioner should be decided at the earliest. However, no order was passed by the respondents on the aforesaid objection of petitioner. The petitioner thereafter has further submitted a representation dated 01.04.2017 and 22.05.2017. The stand in the counter affidavit in paragraph 15 is that the representations of the petitioner were decided by order dated 08.09.2016 and 20.04.2017. However, no order was passed by the respondents on the aforesaid objection of petitioner. The petitioner thereafter has further submitted a representation dated 01.04.2017 and 22.05.2017. The stand in the counter affidavit in paragraph 15 is that the representations of the petitioner were decided by order dated 08.09.2016 and 20.04.2017. A perusal of above-mentioned orders dated 08.09.2016 and 28.04.2017 would demonstrate that the objection by the petitioner against the aforesaid recovery by filing of objection/representation has not been considered and an order has been passed mechanically and without application of mind to the objection raised by the petitioner against recovery. It is to be noted that the employee can always show by filing representation/objection that the recovery/loss to the State is not attributable to the petitioner and that the payment has been made in accordance with law. The employer is required to consider the case of the petitioner in the light of objection raised by the employee. However in the present case, the objection raised by the employee by means of representation have not been considered nor the same has been decided. Such an approach by the employer is in gross violation of principles of natural justice and fair play. 20. The other amount sought to be recovered is with regard to payment of excess salary to the petitioner from the year 2008. The petitioner has retired on 30.06.2014 from the service and after the retirement of the petitioner, excess salary is sought to be recovered by means of impugned orders dated 08.09.2016 and 02.05.2017. It is not the case of the respondents that any fraud or misrepresentation has been made by the petitioner while fixation of the salary. The payment of excess salary is on account of mistake of the employer. As such. in view of the law laid down by the Apex Court in Rafiq Masih (supra) and Thomas Daniel (supra), the aforesaid recovery in not permissible under law. 21. Learned Standing Counsel has tried to defend the recovery of the amount on the basis of consent letter dated 08.07.2016 of the petitioner which according to learned Standing Counsel is the consent to adjust the amount of excess payment made to the petitioner from the retiral dues of the petitioner. He submits that the recovery has been effected on the basis of consent letter dated 08.07.2016 of the petitioner. 22. He submits that the recovery has been effected on the basis of consent letter dated 08.07.2016 of the petitioner. 22. A bare perusal of the above-mentioned consent letter dated 08.07.2016 of the petitioner would go to show that since the petitioner had retired on 30.06.2014 and even after a lapse of two years, retiral benefits of the petitioner were not been paid on account of alleged recovery against the petitioner, the petitioner requested the respondents to temporarily stop the amount equivalent to the alleged recovery and remaining retiral benefits may be released. The petitioner had requested the respondents to temporarily stop the payment of the amount equivalent to the alleged recovery from the retiral dues of the petitioner since the representation against the aforesaid recovery was pending before the respondents for consideration. The aforesaid consent was only to stop the due amount temporarily till the objection and representation of petitioner is pending and release the remaining amount. The employee had never given an undertaking that the recovery amount may be adjusted from the dues. 23. There is one more aspect of the matter that the payment of salary and other financial benefits of an employee is always subject to audit proceeding. Each department of the government is subjected to audit periodically, such periodical audit is done with the object that any mistake by the employer or the authority concerned in payment of financial benefit to the employee, the same may be brought to the knowledge and rectified at the earliest. In the present case, the mistake was made in the year 2008 when the third ACP was granted, however the same was detected after his retirement in the year 2016. The audit is normally held periodically and nothing has been brought on record as to why the audit has not objected to such erroneous fixation earlier. If the government has established the Audit Department to keep a check then it is imperative on the aforesaid department to raise the issue at the earliest. Once an employee has retired and has travelled in service for substantial years after fixation of pay then recovery of such amount at the behest of the employer when there is no fault of employee will entail hardship as the recovery under the equity jurisdiction is not permissible under law. 24. As a result, the writ petition is allowed. Once an employee has retired and has travelled in service for substantial years after fixation of pay then recovery of such amount at the behest of the employer when there is no fault of employee will entail hardship as the recovery under the equity jurisdiction is not permissible under law. 24. As a result, the writ petition is allowed. The impugned order dated 8.9.2016 passed by Executive Engineer, Rural Engineering Department, Ghazipur Division Ghazipur and consequential order dated 2.5.2017 passed by Additional Director, Treasury and Pension, Varanasi Region, Varanasi, are set aside. 25. Consequentially, the amount recovered in pursuance to the impugned orders dated 8.9.2016 and 2.5.2017, shall be restored in favour of the petitioner within a period of three months.