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Case Number

W.P.(S) No. 9716 of 2019

Advocates

Mr. H.B. Agrawal, Senior Advocate with Mr. K.S. Pawar & Mr. S.K. Kushawaha, Advocates
No. 2: Mr. Ashwani Shukla, Advocate
For State/Respondents No. 1 & 3 to 4: Ms. Akanksha Jain, Dy. Govt. Advocate

Judges

Goutam Bhaduri, J.

Acts

Haryana Civil Service (Judicial Branch) and Haryana Superior Judicial Service Revised Pay Rules, 2001.
East Punjab Rent Act,

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Smart Summary

Structured Summary of the Opinion (Goutam Bhaduri, J.)

Factual and Procedural Background

The petitioner retired on 01.06.2019 after serving as Headmaster, Government Primary School (a Class-III post). Following retirement, a recovery notice (Annexure P-2) was served seeking recovery of Rs. 1,50,113/-, said to be excess payment arising from past pay fixation and revision. The record indicates the State sought recovery for amounts paid under a revised pay scale for the period from 1986 to 2013. The petitioner alleges that the recovery demand was served after retirement and that he was compelled to deposit Rs. 1,50,113/- (allegedly on 16.01.2019, according to the opinion) under protest because he was told that his pensionary benefits and retiral papers would not otherwise be processed. The petitioner challenged the recovery as illegal and arbitrary; the petition before the court sought return of the deposited amount and related relief.

Legal Issues Presented

Whether recovery of excess salary/payment after retirement is permissible, particularly where the employee belongs to Class-III service and the recovery notice is issued after superannuation.
Whether an undertaking executed by the employee (dated 01.07.2017) permits the State to recover excess payments made in earlier periods (specifically for 1986–2013) or only covers a specific later period (post 01.01.2016).
Whether a deposit made by a retired employee under the threat that pensionary benefits would be withheld constitutes compulsion/duress such that the deposit must be returned.

Arguments of the Parties

Petitioner's Arguments

The petitioner retired on 01.06.2019 as Headmaster (Class-III) and was served the recovery notice only after retirement.
The recovery of Rs. 1,50,113/- was obtained by coercion or "arm-twisting" because the petitioner was told that unless he paid the amount his pensionary benefits would not be released; thus the deposit was made under compulsion and protest.
Reliance on the ratio in State of Punjab v. Rafiq Masih (2015) 4 SCC 334, which, the petitioner contends, bars recovery after retirement (and in other enumerated situations), particularly for Class-III employees.

State's Arguments

The recovery concerns excess payment made as a result of pay revision and fixation up to 2013; the State relies on an undertaking executed by the petitioner that, according to the State, authorises recovery of any excess payment.
The State placed reliance on High Court of Punjab & Haryana v. Jagdev Singh ((2016) 14 SCC 267 : AIR 2016 SC 3523) where the Supreme Court permitted recovery based on an undertaking required under specific service rules and on the decision in State of Chhattisgarh v. Pramila Mandavi (W.A. No. 376 of 2019) to support recoverability in light of an undertaking.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
State of Punjab v. Rafiq Masih, (2015) 4 SCC 334	Sets out guidelines (para 18) identifying situations where employers' recoveries of excess payments would be impermissible, including: (i) recovery from Class III/IV employees; (ii) recovery from retired employees or those retiring within one year of the order; (iii) recovery when excess payment covers a period in excess of five years prior to recovery order; (iv) recovery where an employee was wrongly required to discharge higher duties; (v) cases where recovery would be iniquitous, harsh or arbitrary.	The court held that the principles in Rafiq Masih are applicable to the petitioner’s facts and supported the conclusion that recovery was impermissible in the circumstances of this case (Class‑III employee, recovery after retirement, and long past period of payment claimed).
High Court of Punjab & Haryana v. Jagdev Singh, (2016) 14 SCC 267 : AIR 2016 SC 3523	Permitted recovery where an undertaking was given in the "first instance" under mandatory service rules, expressly placing the officer on notice that any excess payment would be refunded or adjusted; the undertaking was enforceable because of its linkage with the service rules.	The court distinguished Jagdev Singh: it found that in the present case the petitioner’s undertaking (dated 01.07.2017) was executed much later and only covered excess payments after 01.01.2016; consequently Jagdev Singh's ratio (based on an undertaking given at the outset under service rules) did not apply to recoveries for 1986–2013.
State of Chhattisgarh v. Pramila Mandavi, W.A. No. 376 of 2019 (decided 02.12.2019)	Relied upon by the State as supportive of recoveries where an undertaking exists (as per State submissions).	The court noted the State's reliance but observed that the ratio in that decision cannot be applied universally to the petitioner’s facts; it did not permit recovery here because of factual distinctions.
Sudesh Kumar v. State of Uttarakhand, (2008) 3 SCC 111	Principle that a provision of one statute should not be construed with reference to another statute unless they are in pari materia; decisions on one statute are not relevant to another unless underlying objects are in pari materia.	The court invoked this principle to emphasise that Jagdev Singh (based on special service rules) could not be automatically applied to a different statutory or factual matrix.
Ashok Kumar v. Ved Prakash, (2010) 2 SCC 264	Discusses limits of applying reasoning from one legislative context to another; includes consideration of whether decisions about one statute apply to another.	The court cited paras 22–23 from Ashok Kumar to support the position that decisions concerning one statute (or legislative regime) do not automatically apply to another when the legislatures/contexts differ.
Central Inland Water Transport Corporation Ltd. v. Brojo Nath Ganguly, (1986) 3 SCC 156 : AIR 1986 SC 1571	Principles concerning inequality of bargaining power, unconscionability, and that agreements or acts obtained under compulsion or gross inequality may be contrary to public policy and fundamental principles.	The court applied these principles to find that the petitioner’s deposit was made under compulsion (the threat of withholding pensionary benefits), making the deposit unconscionable and illegal; accordingly, the deposit should be returned.
Harbilas, (1996) 1 SCC 1; Rakesh Vij, (2005) 8 SCC 504; Mohinder Prasad Jain, (2006) 2 SCC 724; State of Madhya Pradesh v. G.C. Mandawar, AIR 1954 SC 493	These cases were cited within the discussion in Ashok Kumar to illustrate limits on applying one statute’s reasoning to another and to highlight when courts may or may not read statutes together.	The court relied on the passage quoted in Ashok Kumar (which references these authorities) to support the methodological point that cross‑statute application of reasoning is not automatic unless the statutes are in pari materia; no direct factual application was made to the petitioner beyond this methodological support.

Court's Reasoning and Analysis

The court proceeded by (i) establishing key factual predicates: the petitioner was a Class‑III employee (Headmaster) who had already superannuated on 01.06.2019 and the recovery notice related to revised pay fixation allegedly spanning 1986–2013; and (ii) analysing competing authorities and the nature and timing of the petitioner’s undertaking.

The court reproduced para 18 of State of Punjab v. Rafiq Masih and treated those guidelines as directly relevant. It observed that several of the Rafiq Masih categories (notably recovery from Class‑III employees and recovery from retired employees) pointed against permitting the recovery sought by the State in this case.

Concerning the State's reliance on Jagdev Singh, the court examined the factual basis of that decision: there the officer was placed on notice in the “first instance” under mandatory service rules and furnished an undertaking contemporaneous with the pay revision process; hence Jagdev Singh allowed recovery based on that undertaking. By contrast, in the present case the undertaking relied upon by the State was executed on 01.07.2017 and, on its face, related only to excess payments after 01.01.2016. The court therefore concluded that the 2017 undertaking could not retrospectively cover excess payments made from 1986 to 2013 and that Jagdev Singh’s reasoning could not be applied to authorize recovery for that earlier period.

The court invoked Sudesh Kumar and the discussion in Ashok Kumar to reinforce a methodological point: reasoning from one statutory or regulatory scheme cannot be mechanically imported into another unless the schemes are in pari materia. This supported the court’s refusal to apply Jagdev Singh’s ratio where the underlying rules and timing of the undertaking differed.

Finally, on the question of the deposit actually being made, the court analysed the circumstances surrounding the payment. It concluded that the petitioner had been placed in a significantly weaker bargaining position (a "sword ... dangling" over him), threatened with withholding of pensionary benefits, thereby compelling payment. Applying the principles from Central Inland Water Transport Corporation Ltd. v. Brojo Nath Ganguly regarding inequality of bargaining power and unconscionability, the court found the deposit to have been made under compulsion and thus unlawful and contrary to public policy and humanitarian considerations.

Holding and Implications

Holding: The petition was allowed to the extent that the deposit of Rs. 1,50,113/- made by the petitioner shall be returned. Specifically, the court directed that the amount of Rs. 1,50,113/- so deposited by the petitioner shall be returned to him by the State within a period of 60 days with interest of 6% per annum.

Implications:

The direct effect is that the State is ordered to refund the deposited sum plus 6% per annum interest within 60 days and the petition is allowed to that extent.
The court distinguished prior decisions (notably Jagdev Singh) where undertakings were given in a different factual and regulatory context and emphasised that the Rafiq Masih criteria apply in the present factual matrix; the opinion therefore confines application of undertakings to their factual scope and timing rather than endorsing a uniform rule permitting post‑retirement recoveries based on later undertakings.
This decision does not purport to establish a novel, universally applicable precedent beyond applying existing authorities (Rafiq Masih, Central Inland Water Transport Corporation, etc.) to the facts; the judgment focuses on the specific factual matrix (timing of undertaking, class of employee, recovery after retirement, and alleged coercion) in reaching its outcome.

Note: All content in this summary is drawn exclusively from the text of the provided opinion and does not add facts or inferences not present in that text.

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Shankar Narayan Chakrawarty v. State Of Chhattisgarh, Through The Secretary, School Education Department And Others

Goutam Bhaduri, J.:— Challenge in this petition is to the order of recovery of Rs. 1,50,113/- which was sought for and was recovered after the petitioner retired on 01.06.2019. It is not in dispute that the petitioner retired after rendering the services as Headmaster, Government Primary School on 01.06.2019. It is contended that the petitioner was served with a notice after the retirement. Further to settle the pension of the petitioner for the first time after two months on 16.08.2019, the recovery notice was served by Annexure P-2. The petitioner contends that the said recovery was made by way of an arm twisting method as after retirement if the amount would not have paid, the further pensionary benefit would not have been given. Consequently, the petitioner was forced to make payment of Rs. 1,50,113/- so that the pensionary benefit survives. It is contended that after the deposit was made, the action of the State respondents is under challenge as illegal and arbitrary. Learned counsel for the petitioner would submit that the ratio laid down in case of State of Punjab v. Rafiq Masih (White Washer) reported in (2015) 4 SCC 334, clearly postulates the recovery of amount after retirement would be barred. It is contended that the petitioner held the post of Headmaster, Govt. Primary School, a Class-III post; therefore, as per the law laid down, the recovery from the petitioner cannot be made.

2. Learned State counsel would submit that the recovery is on the background of the excess payment made as and when the salary was revised. The reference was made to the undertaking given by the petitioner and would submit that the undertaking takes within its sweep entirety the excess payment made, if any. Consequently, as per the law laid down in case of High Court of Punjab & Haryana v. Jagdev Singh reported in (2016) 14 SCC 267 : AIR 2016 SC 3523, the undertaking having been given, the State is within its right to recover. Reliance is also placed in case of State of Chhattisgarh v. Pramila Mandavi decided on 02.12.2019 in W.A. No. 376 of 2019 and would submit that the ratio laid down in such case would also be applicable as the undertaking saves the conduct of the State.

3. Perused the documents. It is not in dispute that the petitioner belongs to Class-III cadre as he was Headmaster in the Primary School. It is also not in dispute that after the petitioner retired, the recovery notice was served on him on the ground that excess payment was made while the pay fixation was made uptill 2013. In case of Rafiq Masih (supra), the Supreme Court at para 18 has laid down the following guideline, which under those conditions makes the recovery impermissible. For the sake of relevance, para 18 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 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 the employees belonging to Class III and Class IV service (or Group C and Group D service).

(ii) Recovery from the retired employees, or the employees who are due to retire within one year, of the order of recovery.

(iii) Recovery from the 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.

4. The reliance placed by the State in case of High Court of Punjab & Haryana v. Jagdev Singh (supra) would show that in such case the Supreme Court permitted the recovery to be made on the basis of undertaking given earlier. In the said case, the respondent was appointed as Civil Judge and Rules governing the service were namely Haryana Civil Service (Judicial Branch) and Haryana Superior Judicial Service Revised Pay Rules, 2001. Under those Rules, each of the officers were required to submit an undertaking that any excess which may be found to have been paid will be refunded to the Government either by adjustment against future payments due or otherwise. Therefore, there was a mandatory requirement under the Rules itself. The Supreme Court while deciding the said case emphatically referred to the service rules and held that undertaking given in such circumstance would be executable and observed it that the ratio of State of Punjab v. Rafiq Masih (supra) cannot be applied uniformly. It was held in case of High Court of Punjab & Haryana v. Jagdev Singh (supra) that the officer to whom the payment was made in the “first instance” was clearly placed on notice that any payment found to have been made in excess would be required to be refunded. Consequently, the officer furnished an undertaking while opting for revised pay-scale.

5. In the instant case, as per Annexure P-2, the recovery has been sought to be made for the period of revised pay scale from 1986 till 01.07.1913. The undertaking on which the State placed reliance is of 01.07.2017 i.e. much after the amount of revised pay-scale was calculated and paid. Reading of undertaking further would show that the petitioner was put to notice that the excess payment made after 1 January, 2016 i.e. one other revised pay scale and thereby consented and undertook to make the payment, if it has been made excess. The undertaking was specially for the specific period starting from 01.01.2016; consequently, it cannot take into sweep the past payment made from 1986 till 2013. The law laid down by the Supreme Court in High Court of Punjab & Haryana v. Jagdev Singh (supra) also clearly marks a distinction as in that case, the officer in the “first instance” was placed on notice that in case excess amount is paid then it would be recovered on account of revised pay scale paid. In the instant case, for the payment made from 1986 to 2013, no such undertaking exists which postulates that petitioner was put on guard and was noticed that excess payment made would be recoverable. Therefore, it cannot be stated that the revised pay scale when was given in 2017, it would include the past pay scale which was paid uptill 2013 as it cannot be applied retrospectively.

6. Therefore, the ratio of judgment of High Court of Punjab & Haryana v. Jagdev Singh (supra) will not be applicable to the case of the petitioner as also the ratio laid down by the Hon'ble Division Bench of this Court in W.A. No. 376 of 2019 cannot be applied universally to the facts of case of the petitioner. The ratio decidendi when applied, it would show that the principles laid down in case of State of Punjab v. Rafiq Masih (supra) would be applicable to the facts of this case instead the case of High Court of Punjab & Haryana v. Jagdev Singh (supra), which is particularly with a special service rule and the execution of the undertaking which was in its inception would not be applicable. As per the ratio of laid down in case of Sudesh Kumar v. State of Uttarakhand reported in (2008) 3 SCC 111, the Court would not construe a section of a statute with reference to that of another statute unless the latter is in pari materia with the former. Therefore, a decision made on a provision of a different statute will be of no relevance unless underlying objects of the two statutes are in pari materia. The decision interpreting various provisions of one statute will not have the binding force while interpreting the provisions of another statute.

7. The Supreme Court in case of Ashok Kumar v. Ved Prakash reported in (2010) 2 SCC 264, at para 22 & 23 held as under:

“22. Before parting with this Judgment, a short submission of the learned counsel for the appellant needs to be dealt with. According to the learned counsel for the appellant, the case of Harbilas [(1996) 1 SCC 1] and Rakesh Vij [(2005) 8 SCC 504] were rendered on the amendments made to East Punjab Rent Act, whereas the case of Mohinder Prasad Jain [(2006) 2 SCC 724] and the issue before us concerned removing a classification which existed from the inception of the legislation. Therefore, according to the learned counsel for the appellant, a decision and reasoning concerning the East Punjab Rent Act cannot apply to a question with respect to the present Act because both the legislations are products of different legislatures and the rationale behind one cannot be compared at par with that of the other.

23. The learned counsel for the appellant, in support of this contention, relied on a decision of this Court in the case of State of Madhya Pradesh v. G.C. Mandawar [AIR 1954 SC 493] and strong reliance on para 9 of this decision was pressed by the learned counsel for the appellant, which may be quoted:

“9. It is conceivable that when the same Legislature enacts two different laws but in substance they form one legislation, it might be open to the Court to disregard the form and treat them as one law and strike it down, if in their conjunction they result in discrimination. But such a course is not open where, as here, the two laws sought to be read in conjunction are by different Governments and by different legislatures.”

8. Therefore, the ratio of judgment rendered in case of State of Punjab v. Rafiq Masih (supra) would be applicable. To conclude, it is observed that the undertaking given by an employee cannot be used uniformly when the recovery of dues is done after his retirement or otherwise there cannot be a straight jacket formula for such recovery. Rather the execution of undertaking, the time when it was executed would be relevant factor to evaluate whether the State can be allowed to act upon on such undertaking. In the facts of this case, the undertaking given by the petitioner in the year 2017 cannot be allowed to stand to recover the dues for the payment made from 1986 to 2013.

9. The facts further would show that the petitioner was required to deposit an amount of Rs. 1,50,113/- after his retirement. The petitioner was superannuated on 01.06.2019 and as per the averments, the said deposit was required to be made on 16.01.2019 in the Treasury, which was done by the petitioner under protest. The petitioner contended that he was told that if he do not deposit the amount, his retiral dues and pension papers would not be prepared. Consequently, the deposit was made under compulsion and under protest. The facts when are examined in the twilight zone of legality, it shows that after the retirement a sword was kept dangling over the head of the petitioner as a threat that if deposits are not made, as required, the pensionary benefit would not be released. Reality therefore was far from rosy-hued narrative. The narrative of the incident suggests when the petitioner was called upon to deposit, the petitioner was not equal in bargaining power. The inequality in bargaining power is the result of disparity, as certainly the petitioner was weaker party in the position to avail the pensionary benefit, which was the means of his livelihood upon terms imposed upon by the stronger party i.e. the State. The petitioner therefore did not have a meaningful choice but to give his assent to deposit the amount; might be it is unfair, unreasonable and unconscionable, therefore, following the principles of the Supreme Court in Central Inland Water Transport Corporation Ltd. v. Brojo Nath Ganguly reported in (1986) 3 SCC 156 : AIR 1986 SC 1571, the actions can be said to be there has been a gross equality of bargaining power between the State and the petitioner as non-payment of the amount would create a sense of insecurity in the mind of the petitioner. The Supreme Court as has been held that in the likewise situation, deciding any case which may not be covered by authority but before the Court the beacon light of Preamble to the Constitution would be available and the Court can always be guided by that light and the principles underlying the Fundamental Rights and the Directive Principles enshrined in the Constitution. Therefore, the deposit under such duress by the petitioner lies on dark side of both illegality and humanitarian principles. Consequently, it would be against the public policy and contrary to the fundamental rights and the directive principles enshrined in the Constitution. Accordingly, it cannot be legalized or insulated.

10. In a result, it is directed that the amount of Rs. 1,50,113/- so deposited by the petitioner shall be returned to him by the State within a period of 60 days with interest of 6% per annum.

11. In view of the above, the petition is allowed to the above extent.

Shankar Narayan Chak... v. State Of Chhattisgar...