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Rajendra Prasad Singh v. State Of U.P. And Othersc
Concise Analytical Summary of the Opinion
Factual and Procedural Background
The appellant was appointed on 15.12.1956 as a Health Visitor in the pay scale of Rs. 354-550. In 1994 a Government Order (G.O.) granted the pay scale of Rs. 470-735 to Multipurpose Health Workers and others with effect from 23.7.1981, and the appellant received the enhanced pay differential pursuant to that G.O. Subsequently that G.O. was set aside and modified by another Government Order dated 23.5.1995. The appellant retired on attaining superannuation before an order of recovery was issued. On 19.1.1998 the respondents issued an order seeking recovery of the excess salary payments from the appellant's pension and gratuity. The appellant challenged that recovery order by filing Writ Petition No. 15313 of 1998; the Single Judge dismissed the writ petition by a judgment dated 27.5.2004 (the opinion notes the Single Judge's judgment date as 27.5.2004 in the opening paragraph, and later references a date of 27.5.2005 in the result paragraph — the court record shows the Single Judge's dismissal which the present Bench set aside). The present intra-court appeal challenges that dismissal and the order of recovery dated 19.1.1998.
Legal Issues Presented
- Whether excess payment of salary made pursuant to a Government Order that is later recalled or set aside can be recovered from an employee's pension and gratuity where the employee was not guilty of fraud, misrepresentation, or other misconduct.
- Whether the lapse of time between payment and initiation of recovery affects the applicability of precedents relied upon by the appellant (i.e., whether recovery is barred when the recovery is sought after a substantial period or after the employee's retirement).
Arguments of the Parties
Appellant's Arguments
- The appellant relied on a number of decisions of this Court and the Apex Court (listed in the opinion) to contend that excess payments made by the State cannot be recovered from an employee unless the excess payment resulted from the employee's fraud, misrepresentation, or misleading conduct.
- The G.O. had been issued by the State and payments were made pursuant to it; therefore, once payment was made under a G.O., subsequent withdrawal of the G.O. should not permit recovery of amounts already paid to the employee who was not at fault.
Respondents' Arguments
- Learned Standing Counsel for the respondents contended that because the Government Order itself (by which the benefit and payment were granted) was subsequently recalled by the State Government, the petitioner had no right to the revised pay scale and recovery from pension/gratuity was justified.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| B. N. Singh v. State of U.P., 1979 ALJ 1184 | Cited by the appellant as authority supporting non-recovery of excess payments where employee is not at fault. | The court listed it among the authorities relied upon and treated it as supportive of the general principle that recovery should not be ordered where the employer (State) is at fault and the employee has not acted fraudulently. |
| Shyam Babu Verma and another v. Union of India and others, 1994 (2) SCC 521 | Cited for the proposition that recovery may be impermissible after a long lapse of time (the appellant relied on it to resist recovery). | The court considered this precedent but rejected the Single Judge's reasoning that a different time-lapse (11 years in that case) made it inapplicable; the present Bench found the facts here (payment in 1994; recovery order 1998) did not support the Single Judge's distinction. |
| Gabriel Saver Fernandes and others v. State of Karnataka and others, 1995 Suppl. (1) SCC 149 | Cited as supporting the appellant's submission that excess payment should not be recovered from an innocent employee. | The court treated it as one of the authorities reinforcing the principle adopted by the Bench. |
| Mohmood Hasan v. State of U.P., JT 1997 (1) SC 353 | Cited for the same general principle against recovery from an innocent payee. | Included among the precedents relied upon and accepted by the court as supporting non-recovery where the employee is not guilty of fraud or misrepresentation. |
| State of Karnataka and another v. Mangalore University Non-Teaching Employees' Association and others, 2002 (3) SCC 302 | Cited as authority relevant to recovery of excess payments and the limits on such recovery. | Recognized by the court as part of the body of case law supporting the appellant's position. |
| Surya Deo Mishra v. State of U.P., 2006 (1) ADJ 467 (All) (FB); 2006(1) ESC 379 (All) (FB) | Relied on by the appellant to show consistent judicial approach against recovery from an innocent employee. | Counted among the authorities the Bench found persuasive on the point that amounts paid due to employer's fault should not be recovered from the employee who did not engage in fraud. |
| Purshottam Lal Das and others v. State of Bihar and others, 2006 (4) ESC 452 (SC) | Cited to support the general principle cited by appellant counsel. | Included by the court as one of the precedents corroborating the non-recovery principle applied by the Bench. |
| M.D./Chief Engineer, U.P. Jal Nigam and others v. Sri Nath Singh and others, Special Appeal No. 1317 of 2003 (this Bench) | This Bench's prior ruling stating that where payment was made due to employer's fault and employee was not guilty of fraud/misrepresentation, amounts already received and spent should not be recovered. | The present Bench explicitly relied on and followed that earlier decision; it quoted the principle and applied it to set aside the recovery order in this appeal. |
Court's Reasoning and Analysis
The court heard learned counsel for both sides and examined the sequence of events and the existing case law cited by the appellant. The Bench concluded that the appellant's contention had substance because of the body of authority (Apex Court and this Court) showing that recovery of excess payments is not permissible where the employee is not at fault (i.e., not guilty of fraud or misrepresentation) and the excess payment was made due to employer's error.
The Bench quoted and relied upon its earlier holding in Special Appeal No. 1317 of 2003 (M.D./Chief Engineer, U.P. Jal Nigam v. Sri Nath Singh), where it was held:
"In the matter of recovery, we may remind to the authorities that now 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."
The Bench found error in the Single Judge's dismissal of the writ petition on the ground that the Shyam Babu Verma decision involved a longer lapse of time (11 years) and therefore was inapplicable. The present record showed that payment was made in 1994 pursuant to the G.O. dated 25.3.1994, while the order of recovery was issued on 19.1.1998 — a lapse of about four years — and the appellant had retired in the intervening period. On these facts, the Single Judge's reasoning was held unsustainable.
Holding and Implications
APPEAL ALLOWED; THE IMPUGNED ORDER DATED 19.1.1998 DIRECTING RECOVERY IS SET ASIDE.
Direct consequences of the holding:
- The judgment of the Single Judge dated 27.5.2004 (the dismissal of the writ petition) was set aside by this Bench.
- The impugned recovery order dated 19.1.1998 was set aside and will not be enforced against the appellant.
- If any amount has already been recovered from the appellant's pension and gratuity, that amount is to be refunded to him within three months from the date of the judgment.
- There shall be no order as to costs.
The opinion applies existing precedents to the facts and does not purport to lay down a new rule of law beyond affirming that recovery of excess payments made by the employer is inappropriate where the employee is not guilty of fraud or misrepresentation. The decision's practical effect is limited to the parties (setting aside the recovery order and providing for refund where applicable).
By the Court. -
his intra-Court appeal arises out of the judgment of Hon'ble Single Judge dated 27.5.2004 in Writ Petition No. 15313 of 1998 dismissing the appellant's writ petition against the order of recovery, which is being sought to be made from his pension and gratuity on account of excess payment of salary when he was in service.
2. We have heard learned Counsel for the petitioner-appellant as well as learned Standing Counsel for the respondents.
3. It appears that the appellant was appointed on 15.12.1956 as Health Visitor in the pay scale of Rs. 354-550. In the year 1994 the pay scale of Rs. 470-735 was given to the Multipurpose Health Workers and others with effect from 23.7.1981. Consequently, the petitioner-appellant was paid the difference on account of enhancement of the scale by virtue of the aforesaid Government Order. However, the aforesaid Government Order was subsequently set aside and was modified by another Government Order dated 23.5.1995. The petitioner-appellant in the meanwhile retired after attaining the age of superannuation. Now after lapse of several years, respondents by the impugned order dated 19.1.1998 have sought to recover the excess payment of salary made to the petitioner from his pension as well as gratuity. Learned Counsel for the petitioner relying on various judgments of this Court as well as the Apex Court namely, B. N. Singh v. State of U.P. and another, 1979 ALJ 1184; Shyam Babu Verma and another v. Union of India and others, 1994 (2) SCC 521; Gabriel Saver Fernandes and others v. State of Karnataka and others, 1995 Suppl. (1) SCC 149; Mohmood Hasan v. State of U.P., JT 1997 (1) SC 353; State of Karnataka and another v. Mangalore University Non-Teaching Employees' Association and others, 2002 (3) SCC 302, Surya Deo Mishra v. State of U.P., 2006 (1) ADJ 467 (All) (FB): 2006(1) ESC 379 (All) (FB) and Purshottam lal Das and others v. State of Bihar and others, 2006 (4) ESC 452 (SC), vehemently contended that the excess payment made by the State Government cannot be recovered from an employee unless it is found that the excess payment was made on account of misrepresentation or any fraud or misleading act on the part of the employee. It is submitted that the aforesaid benefit of revision of pay scale was granted by the State Government by issuing a Government Order pursuant whereto payment was also made. If the State Government has subsequently recalled or withdrawn the aforesaid G.O., the benefit which has already been extended and granted pursuant to which payment was already made cannot now be recovered.
4. On the other hand, learned Standing Counsel opposing the prayer vehemently contended that since the G.O., itself by which payment was made has been recalled by the State Government, the petitioner has no right to draw the revised pay scale and payment has rightly been sought to recover.
5. We are of the view that the contention of learned Counsel for the petitioner-appellant has substance in view of the law laid down by the Apex Court as well as this Court in the judgments relied upon by learned Counsel for the petitioner-appellant which have been followed by this Bench also in Special Appeal No. 1317 of 2003, M.D./Chief Engineer, U.P. Jal Nigam and others v. Sri Nath Singh and others, connected matters in which this Bench has held as under:
"In the matter of recovery, we may remind to the authorities that now 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."
6. We, therefore, are of the view that the Hon'ble Single Judge fell in error by dismissing the writ petition merely on the ground that in the case of Shyam Babu Verma and others v. Union of India and others, (1994) 1 UPLBEC 52, the recovery was being made after lapse of 11 years and, thus, that judgment has no application in the present case since in the present case, recovery is being sought within a period of 10 months. Moreover this finding is also contrary to record because the payment was admittedly made in the year 1994, i.e., immediately after the issuance of the G.O. dated 25.3.1994 where as the order of recovery was passed on 19.1.1998, i.e., after a lapse of about four years. It is not disputed that the appellant has retired after attaining the age of superannuation in the mean time, i.e., before issuance of the order dated 19.1.1998. Thus, the order of Hon'ble Single Judge cannot sustain.
7. In the result, the appeal succeeds and is allowed. The judgment of Hon'ble Single Judge dated 27.5.2005 is set aside. The impugned order dated 19.1.1998 directing recovery of excess amount paid to the petitioner pursuant to the G.O. dated 25.3.1994 is hereby set aside. It is further provided that if any amount has already been recovered from the pension and gratuity of the petitioner-appellant the same would be refunded to him within three months from today.
8. There shall be no order as to costs.
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