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Bihar State Electricity Board And Another v. Bijay Bhadur And Another
Factual and Procedural Background
The Bihar State Electricity Board (“the Board”) adopted the Bihar Government Service (Hindi Examination) Regulations, 1968 by Resolution No. 537 dated 16-7-1979. Regulations 7 and 8 made passing the Hindi Reading-Writing or Hindi Noting and Drafting examination a pre-condition for annual increments, promotion and crossing the efficiency bar, and denied arrears for any withheld increments.
The respondents joined the Board as Accounts Assistants in 1966. Despite not having passed the required Hindi examination, they received regular increments and promotions. After they passed the examination in December 1993, the Executive Engineer issued two memoranda dated 15-2-1996 and 1-4-1996 directing recovery of increments already paid from 1979 onwards. Similar recovery orders against other employees had produced conflicting single-judge decisions in the Patna High Court. A Division Bench eventually quashed the two memoranda. The Board appealed to the Supreme Court, leading to the present judgment.
Legal Issues Presented
- Whether, under Regulations 7 and 8, the Board could retrospectively recover increments paid to employees who had not passed the Hindi examination at the relevant time but had subsequently cleared it.
- Whether the requirement to pass the Hindi examination had become an implied term of service, permitting unilateral alteration of employees’ pay retrospectively.
- Whether the Board’s selective implementation of the Regulations—recovering increments while retaining promotions—was legally and constitutionally permissible.
Arguments of the Parties
Appellant Board's Arguments
- Passing the Hindi examination is a statutory condition precedent to increments; therefore, the respondents were never entitled to the sums paid.
- Regulation 8 fixes the date of entitlement to increments prospectively from the date of passing; arrears are expressly barred.
- Because the payments were unauthorised, the Board is empowered to recover them, irrespective of any mistake in making the original payments.
Respondents' Arguments
- They received increments and promotions without any misrepresentation; the Board’s belated recovery is unfair and contrary to equity.
- The Board itself treated the Regulations flexibly, e.g., by granting promotions and later exempting certain employees under Resolution No. 119 dated 15-3-1996, demonstrating inconsistent enforcement.
- Payments already made over a span of 14–15 years cannot be clawed back when the employees ultimately complied with the examination requirement.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Sahib Ram v. State of Haryana, 1955 Supp (1) SCC 18 | Recovery of excess pay cannot be made where the employee made no misrepresentation; mistake was on the employer’s part. | Relied upon to hold that, absent misrepresentation, the Board cannot recover increments already paid. |
| Saheed Kumar Banerjee v. Bihar SEB (unreported Patna HC) | Similar facts; court disallowed recovery of increments granted without misrepresentation. | Cited approvingly as consistent with the principle that recovery in such circumstances is inequitable. |
Court's Reasoning and Analysis
1. The Court acknowledged that Regulations 7 and 8 make passing the Hindi examination a mandatory pre-condition for increments and promotions. However, it noted that the Board itself had contravened the Regulations by granting promotions while seeking to withdraw only the monetary component (increments). Such “dual standards” were held impermissible for an authority under Article 12 of the Constitution.
2. The Board’s argument that the Regulations were deemed incorporated into the service contract failed; no evidence showed that employees had been informed or that the term had become part of their service conditions.
3. Payments had been made for over 14 years without any misrepresentation by the respondents. Consistent with Sahib Ram, equity forbids recovery in these circumstances.
4. While concurring with the High Court’s ultimate relief, the Supreme Court disapproved the High Court’s observation that arrears became “due” upon passing the examination, because Regulation 8 expressly bars such arrears.
Holding and Implications
Appeals dismissed; recovery orders quashed; no order as to costs.
The decision protects the respondents from retrospective recovery of increments and reinforces the principle that, in the absence of employee misrepresentation, public employers cannot claw back payments made through their own mistake. The Court, however, left Regulation 8 intact for future application, and limited its ruling to the present respondents, indicating no broader change in legal precedent.
Order
1. Leave granted.
2. The Bihar State Electricity Board (for short “the Board”) is in appeal before this Court against the judgment of the Division Bench of the Patna High Court wherein two memoranda dated 15-2-1996 and 1-4-1996 issued by the Executive Engineer of the Board stand set aside and quashed.
3. On the factual score it appears that both the writ petitions CWJCs Nos. 4576 and 1007 of 1997 contained a challenge to the above-noted two office orders dated 15-2-1996 and 1-4-1996. The writ petitioners, respondents herein, assert that both the writ petitioners have been given yearly increments based on service records without any misrepresentation on their part and that they have passed the Hindi Noting and Drafting Examination in the year 1993. The Board, however, on the basis of the above-noted two memoranda had ordered for recovery of diverse sums of money paid to them as and by way of increments on the ground that they did not pass the Hindi Noting and Drafting Examination at the relevant time which was a condition precedent for the grant of annual increment in terms of the policy decision of the Board.
4. Be it noted that the Board by its Resolution No. 537 dated 16-7-1979 adopted the Bihar Government Service (Hindi Examination) Regulation, 1968 and made it applicable to the Board employees. Regulations 7 and 8 are set out hereinbelow:
“7. Such government servants, who have to pass the Hindi Reading-Writing Examination in Devnagari script or Hindi Noting and Drafting Examination in Devnagari script or both the examinations, shall neither be given increment nor be confirmed nor should they be allowed to cross the efficiency bar till such time as they pass the required Hindi examination or examinations.
8. Stoppage of increment shall have non-cumulative effect. The government servant concerned after passing the required examination or examinations, shall draw pay from the following date of that last examination at which he appeared and passed, at that stage of the timescale to which he shall be entitled, if his increment (increments) had not been stopped. No arrears of the stopped increment shall be payable.”
5. Even a cursory look at the above-noted two Regulations would depict the mandatory requirements of the Regulation that persons not being able to pass the Hindi Noting and Drafting Examination in Devnagari script or the Hindi Reading and Writing Examination in Devnagari script or both the examinations shall not be given increments or any promotion nor be allowed to cross the efficiency bar till such time the employees passed such examination or examinations and the entitlement to increment or promotion or crossing of the efficiency bar would commence only after passing of the required examination or examinations and not at any time prior thereto. It has been specifically stated that no arrears of the stopped increments shall be payable.
6. On the further factual score it appears that the writ petitioner, Shri Bashishtha Narain Prasad and another being respondents herein, joined the services of the Board in or about the year 1966 as Accounts Assistants and in due course of time they were, as a matter of fact, being paid in the normal course of events their salaries together with all due increments and also promotions in the scale and the grade. Resolution No. 537 dated 16-7-1979 as noted above was adopted by the Board making it necessary for the employees to pass the departmental examination of Hindi Noting and Drafting but in spite thereof all due promotions and increments were allowed to the petitioners and it is on this score that the petitioners assert that only in the year 1993 they came to know about the requirement and as such appeared in the examination in December 1993 wherein the petitioners were declared successful. Incidentally the Board also by Resolution No. 119 dated 15-3-1996 laid down that all employees of the Board excepting Class IV employees should pass such an examination within 31-3-1997. In the said resolution the Board, however, did exempt those employees having a length of service of 30 or more years or are of the age of more than 55 years from such a requirement of examination and it is on this score that it was contended before the High Court, as appears from the record, that the Board itself was not very serious as regards the implementation of such a requirement as otherwise the resolution of 1979 could not have been dealt with in the manner as it had been by Resolution No. 119. The records depict that the Board has in fact started implementing the 1979 resolution retrospectively and started deducting the increments already granted from the salaries of the employees on or since the year 1994 and it is on this count that several writ petitions were filed and the learned Single Judges of the Patna High Court in fact have quashed the orders for recovery of such an amount on the ground that there have been no misrepresentations on the part of the petitioners and as such the amount already paid to the employees could not be recovered even if the same were paid by mistake. Subsequent thereto, however, a different view was expressed by some of the learned Single Judges of the Patna High Court by reason wherefor the matter was placed before the Division Bench and the latter by its judgment quashed the above-noted two recovery orders and hence these appeals before this Court.
7. Admittedly, the writ petitioners have been allowed annual increments even without passing the Hindi Noting and Drafting Examination which according to Mr Pramod Swarup, learned advocate appearing for the appellant Board has become a condition precedent and part of their service conditions and question of there being any entitlement dehors the same does not and cannot arise. Mr Swarup contended that Regulation 8 is rather categorical on this score as to the date of entitlement and since its deemed effect as a part of the condition of service, the appellant Board is within its authority and jurisdiction to deduct the amounts paid. In short, the submission of Shri Swarup on behalf of the appellant Board is that since the writ petitioners are not entitled to receive any increment, question of retention of the amounts paid whether by mistake of fact or otherwise does not and cannot arise. We, however, are not in a position to lend any credence to the same by reason of the fact that while the increments granted have been sought to be recovered but promotions given have not been withdrawn or cancelled, the Board being the governmental agency and fairness being the only accepted methodology cannot maintain a dual standard on the basis of the selfsame Regulation. Regulation 7 of the Regulation itself provides that there shall not be any increment or any promotion nor would the employees be allowed to cross the efficiency bar. The petitioners have been given due promotions and as a matter of fact the petitioner in CWJC No. 4576 of 1997 is posted as an Accountant in the Electricity Supply Sub-Division at Sheohar Town in District Sheohar on promotion. Of the dual benefits conferred the Board however thus withdrew only one part of the benefit under the resolution whereas it lent a blind eye as regards the other part of the benefit flowing from the resolution. This, in our view is not permissible since dual standards are not only non-acceptable but ought to be avoided more so by reason of the factum of the appellant being an authority within the meaning of Article 12 of the Constitution.
8. The contention in support of the appeal as regards the deemed incorporation in the terms and conditions of service cannot also find any support by reason of the fact that unilateral change of terms need not be had. There is no documentary evidence available on the record of this matter through which even an intimation to the staff can be said to have been effected and in the absence of which question of affording any credence to the submission of Mr Swarup on this score does not arise.
9. Further, an analysis of the factual score at this juncture goes to show that the respondents appointed in the year 1966 were allowed to have due increments in terms of the service conditions and salary structure and were also granted promotions in due course of service and have been asked after an expiry of about 14-15 years to replenish the Board exchequer from out of the employees' salaries which were paid to them since the year 1979. It is on this score the High Court observed that as both the petitioners have passed the examination though in the year 1993, their entitlement for relief cannot be doubted in any way. The High Court has also relied upon the decision of this Court in the case of Sahib Ram v. State of Haryana 1955 Supp (1) SCC 18 wherein this Court in para 5 of the Report observed:
“5. Admittedly the appellant does not possess the required educational qualifications. Under the circumstances the appellant would not be entitled to the relaxation. The Principal erred in granting him the relaxation. Since the date of relaxation the appellant had been paid his salary on the revised scale. However, it is not on account of any misrepresentation 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 principle 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.”
10. The High Court also relied on the unreported decision of the learned Single Judge in the case of Saheed Kumar Banerjee v. Bihar SEB. We do record our concurrence with the observations of this Court in Sahib Ram case and come to a conclusion that since payments have been made without any representation or a misrepresentation, the appellant Board could not possibly be granted any liberty to deduct or recover the excess amount paid by way of increments at an earlier point of time. The act or acts on the part of the appellant Board cannot under any circumstances be said to be in consonance with equity, good conscience and justice. The concept of fairness has been given a go-by. As such the actions initiated for recovery cannot be sustained under any circumstances. This order however be restricted to the facts of the present writ petitioners. It is clarified that Regulation 8 will operate on its own and the Board will be at liberty to take appropriate steps in accordance with law except however in the case or cases which has/have attained finality.
11. While we record our concurrence as noted above, in regard to the decision of the matter in issue and in particular reference to the factual aspect we do not feel inclined to accept the observations of the High Court pertaining to Regulation 8 of the Regulation. Be it noted that the High Court in para 13 of the judgment observed that the Board shall not be allowed to pass an order for recovery of the said amount as the said amount has already become due to them. This observation sounds contrary to Regulation 8 of the Regulations which records that no arrears of the stopped increments shall be payable even though the person would pass the examination later on. We, therefore, record our disapproval to this observation of the High Court.
12. In the view aforesaid, we do not find any merits in these appeals. The appeals are, therefore, dismissed. But, there shall be no order as to costs.
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