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Judicial Opinion — Structured Summary

Factual and Procedural Background

The petitioner was appointed as a lady doctor by the Secretary, District Red Cross Society, Ambala, for the Family Welfare Planning Centre, Yamuna Nagar with effect from 25.6.1975. The normal age of superannuation for the Society at the relevant time was 58 years. The Society adopted Staff Rules of 2002 which provided that an employee shall retire on attaining 58 years but may be allowed to work up to 60 years with appropriate approvals.

The petitioner attained 58 years on 31.10.2004 but was continued in service and the Society recommended extension up to 60 years to the Director Health Services, Haryana. The Director Health Services communicated on 9.2.2005 that if an employee is retained beyond 58 years, the State would not pay salary and the Society would have to bear the expense. That decision was communicated to the petitioner on 10.2.2005 and the petitioner was retired on that date.

The petitioner filed a writ petition seeking payment of salary and post-retiral benefits. A Division Bench directed respondent No.2 to decide the petitioner's representations within three months and to pass a speaking and reasoned order if the claim was denied. Pursuant to that direction, respondents passed an order dated 4.7.2005 declining salary for the overstay period but accepting the claim for CPF subject to recoveries for alleged pay-scale discrepancies based on a 9.2.2005 communication.

The Society had passed a Resolution No.5 providing that employees of the Society would be governed by the Punishment and Appeal Rules applicable to State employees and entitled to leave, travel allowances and pay scales in line with the Haryana Government. The petitioner challenged: (a) denial of salary for the period beyond 58 years (1.11.2004 to 10.2.2005), and (b) proposed recoveries from post-retiral dues on account of alleged excess payment of selection grade and adjustment of ACP dates.

Legal Issues Presented

  1. Whether the petitioner is entitled to salary for the period she continued in service beyond 58 years of age (specifically from 1.11.2004 to 10.2.2005).
  2. Whether the petitioner is entitled to post-retiral benefits (gratuity, leave encashment, provident fund) as per the rules and State government norms in light of Resolution No.5 adopted by the Society.
  3. Whether respondents can effect recovery from the petitioner's emoluments/post-retiral dues on account of alleged excess payment of selection grade and differing ACP effective dates.
  4. Whether a writ petition is maintainable against the District Red Cross Society.

Arguments of the Parties

Petitioner's Position

  • The petitioner sought salary for the period 1.11.2004 to 10.2.2005 during which she was retained in service beyond 58 years and actually performed duties.
  • The petitioner claimed post-retiral benefits including gratuity (under the Payment of Gratuity Act, 1972), leave encashment as admissible to Haryana State Government employees, provident fund and related statutory interest, relying on Resolution No.5 adopted by the Society which purportedly places Society employees under State-like benefits and rules.
  • The petitioner challenged the respondents' attempt to recover alleged excess payments and challenged the refusal to fix pay as claimed by her.

Respondents' Position (State and Society)

  • The Society/state relied on staff rules and the fact that projects run on grant-in-aid from the Haryana Government or Central Government are governed by the rules applicable to grant-in-aid staff; services continue as long as the grant exists. The Director Health Services communicated that if an employee is retained beyond 58 years, the State will not pay salary and the Society must bear such expenses.
  • The Society contended that the petitioner was serving on a project and therefore governed by the service conditions of that project under which she was allegedly not entitled to leave salary, gratuity or other post-retiral benefits payable to State Government employees.
  • The respondents sought to recover alleged excess payment on two grounds stated in a 9.2.2005 communication: (i) the petitioner had been granted a selection grade of Rs. 4100-5300 w.e.f. 1.5.1989 whereas that scale was said to be admissible only w.e.f. 1.1.1998 and applicable only to certain cadre posts; and (ii) ACP benefit was payable w.e.f. 1.1.1998 instead of 1.1.1996. Respondents sought recoveries from emoluments or post-retiral dues on these bases.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Sahib Ram v. State of Haryana and Ors, 1995 Supp (1) S.C.C. 18 The principle that where an employee has been paid higher pay owing to a wrong construction by an authority and not by misrepresentation by the employee, the amount paid may not be recoverable from the employee; the employee should not be penalized by recovery absent fraud or misrepresentation. The Court applied this principle to hold that recoveries from the petitioner on account of alleged excess payment of selection grade were not sustainable because no fraud or misrepresentation was pleaded against the petitioner and the excess was drawn openly during service.
Karnail Singh v. State of Punjab, 2003 (2) R.S.J. 433 Followed the principle in Sahib Ram (as noted by the Division Bench). The Court noted that the Division Bench of this Court had followed Sahib Ram, supporting the conclusion that recovery was not sustainable in similar circumstances.
The District Red Cross Society, Sirsa v. Radha Kishan Rajpal, 2005 (1) S.C.T. 41 Authority on maintainability of writ petitions against a District Red Cross Society (as decided by a Division Bench). The Court relied on this Division Bench judgment to reject the preliminary objection to the maintainability of the writ petition against the Red Cross Society.

Court's Reasoning and Analysis

The Court proceeded by applying the Society's own rules, the factual matrix of continuation of service, the Society's Resolution No.5 and the relevant precedents:

  1. Rules and factual retention: The Staff Rules allowed retention beyond 58 up to 60 years with approval. The petitioner had reached 58 on 31.10.2004 but the Society continued her in service, paid salary and allowances, and recommended extension to the State. There was no allegation that the petitioner continued by fraud or misrepresentation.
  2. Effect of Director's communication: The Director Health Services' communication on 9.2.2005 stated that the State would not pay salary for extension beyond 58 and the Society would have to bear expenses; upon receipt of that communication the Society terminated the extension and retired the petitioner on 10.2.2005. The Court observed that because the petitioner actually performed duties during the extended period and was retained by the Society, she is entitled to salary for that period.
  3. Resolution No.5 and entitlement to benefits: The petitioner produced Resolution No.5 which provided that Society employees are to be governed by Punishment and Appeal Rules applicable to State employees and are entitled to allowances of leave and travel and pay scales like State employees. Respondents did not deny the resolution’s passing or adoption. The Society's contrary contention that project service conditions bar post-retiral benefits did not displace Resolution No.5 in the Court's analysis.
  4. Recoveries for alleged excess payment: The respondents asserted that selection grade had been improperly granted from 1.5.1989 and that ACP entitlement dates differed. The Court noted that the petitioner drew the selection grade openly from 1.5.1989 until retirement and that no objection was raised during service nor any allegation of fraud made against the petitioner. Applying Sahib Ram and its acceptance in subsequent Division Bench authority (Karnail Singh), the Court held that recoveries were not sustainable where an employee was not at fault and had been paid in service.
  5. Maintainability: The objectors' submission that a writ was not maintainable against the Red Cross Society was rejected on authority of District Red Cross Society, Sirsa v. Radha Kishan Rajpal (Division Bench, 2005), which the Court regarded as binding.

Holding and Implications

PETITION ALLOWED

Holding (direct effect): The Court allowed the petition and directed respondents to:

  • Pay the petitioner salary for the period from 1.11.2004 to 10.2.2005.
  • Pay leave encashment as permissible to Haryana State Government employees.
  • Pay gratuity under the Payment of Gratuity Act, 1972, and provident fund contributions, each with statutory interest.
  • Pay interest on withheld salary and leave encashment at the rate of 6% per annum from one month after the date of retirement (i.e., from 10.2.2005) until actual payment.
  • Refrain from effecting any recovery from the petitioner's emoluments or post-retiral dues on account of the alleged excess payment of selection grade.
  • Settle and pay all claims within three months from the date of the order.

Broader implications: The decision enforces the petitioner’s entitlement to remuneration and post-retiral benefits in accordance with the Society's Resolution and established precedents where employees received payments without fraud and obligations to repay were not sustained. The opinion does not purport to set a novel legal principle but applies existing precedent (Sahib Ram and related authorities) to the facts; its immediate effect is to grant relief to the petitioner and to restrain recoveries in this case.

This summary is based exclusively on the content of the provided court opinion and does not add information beyond the text.

    Dr. Swaran Sharma v. State Of Haryana And Anr.

    1. The petitioner was appointed as a lady doctor by the Secretary, District Red Cross Society, Ambala for the Family Welfare Planning Centre, Yamuna Nagar w.e.f. 25.6.1975 vide appointment letter dated 25.6.1975. Her engagement continued till 10.2.2005 when the petitioner was finally retired from service. It is not in the dispute that the normal date of superannuation in the Red cross Society at the relevant time was 58 years. The society framed and adopted the rules, namely, Indian Red Cross Society and St. John Ambulance Association, District Branch, Yamuna Nagar Staff Rules of 2002 which, interalia, provides as under:

    Superannuation & Retirement:

    11. An employee shall retire on attaining the age of 58 years. He may, however, be allowed to work upto the age of 60 years by the appointing authority, if his performance is satisfactory and he is physically fit. No extension beyond 60 years shall be given except with the prior approval of the President.

    Provided that an employee may seek voluntary retirement before attaining the age of 58 years, after completing 20 years service, and giving 3 months clear notice of his intention to do so. In that case, he shall be entitled to benefits admissible to him under the Rules according to his length of service.

    Provided that an employee, may, however be permitted to withdraw his notice with the approval of the competent authority.

    The date of retirement of the employees except those whose date of birth falls on the 1st day of month, will be the afternoon of the last day of month, in which the date of their retirement falls instead of the actual date of their superannuation. In the case of those employees whose date of birth falls on the 1st day of the month, the date of retirement will be the afternoon of the day of the month preceding the month their date of birth falls.

    12 & 13 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX

    14. Employee of the Society/Association shall be entitled to leave as per Haryana Government Leave Rules.

    2. A bare perusal of these rules indicates that the society may retain an employee beyond 58 years of age up to the age of 60 years with the prior approval of the President. The petitioner attained the age of superannuation i.e. 58 years on 31.10.2004. However, the society continued the petitioner and recommended for extension of her services upto the age of 60 years to the Director Health Services, Haryana. It appears that the society was getting grant-in-aid and thought it proper to seek approval of the Director Health Services, Haryana. The Director Health Services vide its letter dated 9.2.2005 informed the society that in the event an employee is to be retained in service beyond the 58 years of age then no salary will be paid by the State Government and, society will bear the expenses in respect of such employee. This decision was communicated to the petitioner on 10.2.2005.

    3. The petitioner approached this Court seeking a direction for payment of salary and other post retiral benefits in C.W.P. No. 6001 of 2005, a Division Bench of this Court disposed of this writ petition with the following directions:

    After hearing the learned Counsel for the petitioner, we dispose of this writ petition with a direction to respondent No. 2 to take a decision on the representations Annexures P-5, P-8 and P-9, within a period of three months from the date that a certified copy of this order is supplied to him. In case the petitioner's claim is to be denied, the respondent shall pass a speaking and well reasoned order and communicate the same to the petitioner.

    4. In furtherance to the directions of this Court in the aforesaid judgment dated 12.4.2005, respondents have passed the order dated 4.7.2005, declining the salary to petitioner for the period of overstay beyond 58 years of age. However, the claim for CPF amount was accepted with the condition that recovery, if any, will be deducted on account of discrepancy in pay scale. The Director Health Services also issued a communication dated 9.2.2005 to the Secretary Red Cross Society whereby certain recoveries have been ordered from the emoluments of the petitioner on the ground that the petitioner has been granted selection grade of Rs. 4100-5300 w.e.f. 1.5.1989 whereas this pay scale was admissible w.e.f. 1.1.1998. This grade is payable to only 20% officers working on cadre posts. There is only one post of Medical Officer at the Centre to whom this grade is not admissible. This letter further indicated that the petitioner is entitled to ACP benefit w.e.f. 1.1.1998 instead of 1.1.1996. The petitioner is aggrieved of the aforesaid two communications i.e. 9.2.2005 whereby recovery is sought to be made from her and the communication dated 4.7.2005 vide which his claim regarding pay fixation has been rejected.

    5. The petitioner has brought on record resolution No. 5 passed by the society wherein the employees of the society are to be governed by the Punishment and Appeal Rules as are applicable to the employees of the State Government. Similarly, the employees of the Society are also entitled to the allowance of leave and travel as are prevalent in Haryana Government and even the pay scale payable to the employees are the same as are meant for the State of Haryana. The claim of the petitioner is resisted by the State of Haryana as also by the Society on the grounds indicated in the impugned order dated 4.7.2005 and letter dated 9.2.2005.

    6. I have heard learned Counsel for the parties.

    7. The petitioner has two kinds of claim; one salary for the period from 1.11.2004 till 10.2.2005, the period when the petitioner continued in serviced beyond 58 years of age and second; recovery from his post retiral dues. Admittedly, during this period the petitioner was made to work. The respondents have extracted work from him. It is not the case of the respondents as the petitioner continued in service beyond 58 years of age on account of any kind of fraud, and/or misrepresentation on her part. To the contrary, the respondents' society itself retained her after superannuation, continued to pay salary and other allowances and recommended her case to the State Government. It clearly indicates that the society of its own and without any misrepresentation on the part of the petitioner allowed her to continue in service. It is only when the Director Health Services, Haryana informed the society that in the event of extension, the society will have to bear the expenses of retention in service of the petitioner, petitioner's extension was terminated and she was made to retire on 10.2.2005. Since the petitioner has performed the duties during the extended period of employment, she is entitled to salary for this period. As far as the other aspects of payment of post retiral benefits is concerned, the petitioner has brought on record the Resolution No. 5. Respondents have not denied the passing as well as the adoption of such resolution. Only objection raised by the society is that the petitioner was serving on a project and is governed by the service conditions of Scheme of the project. Under this project, she is not entitled to leave salary, gratuity or any other post retiral benefits which are payable to the State Government employees. The order of the appointment of the petitioner refers to the terms and conditions dated 18.2.1975. None of the parties placed on record this letter to indicate as to what were the terms and conditions for the appointment of the petitioner. The resolution No. 5 adopted by the society provides for payment of all allowances of leave and travel and also the pay scale.

    8. Learned Counsel appearing for the State has referred to para 6 of the reply wherein reference is made to Indian Red Cross Society and St. John Ambulance Association, District Branch (Yamuna Nagar), Staff Rules, 2002. In this, it is mentioned that the services of the staff employed in different project of Red Cross, Yamuna Nagar which will run by grant in aid received for Red Cross Society, Yamuna Nagar from Haryana Govt. or Govt. of India, New Delhi, shall be governed by Rules of services of employees under grant-in-aid scheme. It further clarifies that their services shall continue as long as the grant exists. This rule does not in any manner deprive the petitioner of the post retiral benefits which are being claimed by her. The petitioner has claimed gratuity, leave encasement, salary for the period w.e.f. 1.11.2004 to 10.2.2005, provident fund and has also challenged the action of the respondents for recovery of alleged excess salary. In view of Resolution No. 5, petitioner is entitled to-all the post retiral benefits as are available to the employees under State Government. Therefore, petitioner is entitled to gratuity as per the provisions of Payment and Gratuity Act, 1972, leave encashment as provided to State Govt, employees and also provident fund contribution. It is not in dispute that the petitioner has contributed towards provident fund. Therefore, the same is to be paid to the petitioner alongwith statutory interest payable on such contribution. The other dispute raised is in terms of letter dated 9.2.2005 wherein certain recoveries are sought to be effected from the emoluments of the petitioner. Admittedly, the petitioner was allowed to draw the alleged excess salary right from 1.5.1989 and her pay fixed accordingly. She continued to receive selection grade till her retirement i.e. on 10.2.2005. During the period she was in service, no objection was ever raised nor any recovery sought from her. It is not the case of the respondents that selection grade was released in favour of the petitioner on account of any fraud attributed to her. The issue is no more res integra and has been concluded in the judgment cited as Sahib Ram v. State of Haryana and Ors. 1995 Supp (1) S.C.C. 18 wherein the Apex Court has observed as under:

    Admittedly, the appellant does not possess the required educational qualifications. Under the circumstances, the appellant would hot be entitled to the relaxation, the appellant had been paid his salary on the revised scale. However, it is act on account of any mis-representation 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 principal 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.

    9. This judgment has been followed by Division Bench of this Court in case Karnail Singh v. State of Punjab 2003 (2) R.S.J. 433. In view of the above circumstances and law laid down by the Apex Court, the action of the respondents in effecting any recovery from the petitioner on account of alleged excess payment of salary is also not sustainable in law.

    10. Learned Counsel for the respondent has raised a question as to maintainability of writ petition against the Red Cross Society. However, this issue has been decided by Divisional Bench of this Court in The District Red Cross Society, Sirsa v. Radha Kishan Rajpal 2005 (1) S.C.T. 41. In view of the Division Bench Judgment which is binding upon this Court, this preliminary objection is not valid.

    11. For the above reasons, this petition is allowed. Respondents are directed to pay the salary to the petitioner for the period w.e.f. 1.11.1994 to 10.2.2005. She is also entitled to leave encashment as is permissible to the Haryana State Government employees as well as gratuity and Provident Fund in accordance with the rules and Payment of Gratuity Act, 1972. Provident Fund and Gratuity will carry statutory interest. Since the salary and leave encashment has been withheld by the respondents/petitioner is also entitled to interest on the sum payable at the rate of 6 per cent per annum after expiry of one month from the date of retirement i.e. 10.2.2005 till the amount is actually paid. Respondents are also restrained from effecting any recovery from emoluments of the petitioner on account of alleged excess payment. Let all the claims be settled and paid within period of three months from today.

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    Dr. Swaran Sharma v. State Of Haryana And Anr.
    (Aug 29, 2007)