IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. CWP (T) No. 16714/2008 Reserved on: 24.8.2010 Decided on: 30.8. 2010 _____________________________________________ Basu Dev Singh Rathore. …Petitioner. Versus Himachal Pradesh State Electricity Board & others. … Respondents. _______________________________________________________ Coram: Hon’ble Mr. Justice Rajiv Sharma, Judge. Whether approved for reporting?1 Yes For the petitioner : Ms. Kanta Thakur, Advocate. For the Respondents: Mr. Shashi Shirshoo, Advocate. ____________________________________________________ Rajiv Sharma, Judge. Petitioner superannuated on 31.12.1990. However, his pensionary/retiral benefits were not released by the respondent- Board. Provisional pension was paid to the petitioner with effect from 17.2.1992. He was paid regular pension vide order dated 7.9.1993. Ms. Kanta Thakur has strenuously argued that her client is entitled to interest as per market rate on the delayed payment of 1 Whether reporters of the local papers may be allowed to see the judgment? Yes pensionary/retiral benefits. She also contended that the respondents have adjusted a sum of Rs.41,580/- from DCRG on the ground that the petitioner was not entitled to special pay with effect from 1.1.1977 to 31.12.1990. Mr. Shashi Shirshoo has strenuously argued that the delay has occurred in the release of pensionary/retiral benefits since the pay of the petitioner was not revised with effect from 1.2.1968 and 1.1.1972 by the MPP and Power Department. He further contended that since the matter remained under correspondence, there is no delay in releasing the pensionary/retiral benefits. I have heard the learned counsel for the parties and have perused the pleadings carefully. Petitioner was required to be paid his pensionary/retiral benefits immediately after his retirement on 31.12.1990. He has only been paid provisional pension on 17.12.1992 that too without interest. His pension was released on 7.9.1993. However, no interest was paid on this payment also with effect from 1.1.1991 till 6.9.1993. Mr. Shashi Shirshoo has argued that the petitioner was not entitled to special pay with effect from 1.1.1977 to 31.12.1990 and the petitioner has been made over-payment of Rs. 58,582/- and the same has been adjusted from DCRG amounting to Rs. 41,580/- and the remaining amount is also required to be adjusted from the pensionary/retiral benefits of the petitioner. Admittedly, the petitioner has not been heard before the decision was taken by the respondent-Board to adjust a sum of Rs. 41,580/- from the DCRG of the petitioner towards over payment of Rs. 58,582/-. The retiral/pensionary benefits are property within the meaning of Article 300-A of the Constitution of India. Petitioner has suffered civil and evil consequences after the decision has been taken by the respondent-Board to adjust a sum of Rs. 41,580 from the DCRG of the petitioner. The Division Bench of this Court in Vidya Sagar Sharma versus State of Himachal Pradesh through Secretary (Forests) and others, ILR 1986 HP 20 has held that principles of natural justice are required to be followed in case any recoveries etc. are to be made from pension/DCRG amounts. The Division Bench has further held that recovery on account of over-payment and on account of excess consumption of certain articles can only be held in accordance with the principles of natural justice. The Division Bench has held as under: “19. In light of the aforesaid meaning in law of the word “dues”, which governs also the Government dues of the nature specified in sub-rule (3) of Rule 71, it is apparent that the Head of Office, will have together, in the first instance, from different sources all the material particulars in order to satisfy himself whether any ascertainable sum(s) is factually owed by the Government servant to the Government and whether such sum is outstanding till the date of his retirement and, if so, whether the debt is legally enforceable and recoverable from the Government servant. In the very nature of things, several questions of fact and law may arise in the process of such ascertainment, especially when the Government servant disputes his liability, and in order to determine those questions, the Head of Office will have to hold some sort of an inquiry, suitable to the occasion and appropriate in the circumstances of the case. The adoption of such a procedure is inevitable on the part of the head of Office in order to arrive at a just, proper and legal decision in the discharge of the duty entrusted to him under the law. The association of the Government servant with such an inquiry must be regarded as essential in order to gather facts and/or to seek clarifications on issues of fact and law and/or to ascertain whether he admits or denies the liability wholly or partially, and to give him an opportunity to correct or controvert the material sought to be relied against him and/or to put forward his own version concerning the matter. The process of ascertainment of government dues cannot but be regarded as quasi-judicial in nature, since, the ultimate decision may result in the recovery of such dues from the amount of DCRG, which is property, and may thus involve civil consequences for the Government servant. A reasonable opportunity of hearing coupled with the duty to act judicially and to arrive at a just and fair decision pursuant to an inquiry held in accordance with law must, therefore, be regarded as implicit in the relevant provisions of the Pension Rules and a sine qua non to the exercise of the power of ascertainment and assessment of Government dues and of their recovery out of or adjustment against the DCRG payable to a retiring or a retired Government servant. Unless the Rules are so understood and enforced, they would be exposed to the vice of unconstitutionality. 20. Against the aforesaid background, the question may be first examined whether the non-release of the DCRG, on the ground that a recovery is to be effected therefrom on account of the alleged over-payment of salary in the sum of Rs. 1226.05 pursuant to the refixation of pay, is legally justified. The alleged excess payment in the afore- mentioned sum is stated to have resulted on account of the wrong fixation of pay of the petitioner in the revised scale due to clerical mistake arising out of an error of judgment and the refixation is stated to have been made in accordance with the instructions issued by the State Government in that regard. The particulars furnished in para 3 of the affidavit-in-reply of the third respondent show that the refixation accordingly done results in the reduction of the pay of the petitioner in the revised scale by Rs. 25/- on and from January 1, 1978 and that the reduction according made is reflected all throughout from month to month till the date of his retirement. It is not in dispute that no opportunity whatsoever was given by the concerned respondents to the petitioner before the aforesaid Government dues were ascertained and recovery was ordered. If such an opportunity ahd been afforded he could have pointed out that the pay was initially correctly fixed in the revised pay scale at the proper stage and that there was no over-payment either as a result of a mistake of law or of fact, or that the government was not entitled to recover the alleged over payment, spread over a period, after such a lapse of time, or that the Government was estopped from claiming restitution since the payments, if any, were made due to the negligence in the discharge of duty on the part of the concerned employees of the respondents to determine the emoluments correctly and not to misrepresent them, and since the petitioner, bona fide, in reliance on the conduct in making the payment from month to month over a period of time, was entitled to treat the money as his own, and without notice of their claim, had spent the whole of the sums over paid in ordinary living expenses or otherwise for his own purposes, and that it would be unjust and inequitable to recover from the pensionary benefits those sums. It would not be out of place to mention in this connection that the petitioner has, in fact, raised a serious dispute with regard to the refixation of his pay upon revision on more than one ground and that the petitioner could have legitimately pleaded, if a fair opportunity of hearing had been afforded to him, that there was, in fact, no over- payment of pay and allowances and that such over- payment, if any, should at least be waived of. Under the circumstances, the refixation of the pay of the petitioner in the revised pay scale behind his back is arbitrary and illegal and so is the consequential decision to order the recovery of the sum of Rs. 1226.05 from the DCRG payable to him on the ground of the alleged excess payment of salary.” The Division Bench of this Court in same volume in Ghelo Ram versus H.P. State Electricity Board and others, ILR 1986 HP 303 has held that any culpable delay in the settlement and disbursement of pensionary benefits must be visited with the penalty of payment of interest at the current market rate. In the instant case neither any show cause notice was issued to the petitioner nor any departmental proceedings were ever instituted against him for effecting recovery from pensionary/retiral benefits of the petitioner. The matter is required to be considered from another angle. Petitioner has neither misled nor mis-represented the authorities at the time of release of special pay with effect from 1.1.1977 to 31.12.1990. The decision has been taken by the respondent-Board at a belated stage when the petitioner has retired from service. Their Lordships of the Hon’ble Supreme Court in Syed Abdul Qadir and others versus State of Bihar and others, (2009) 3 SCC 475 have culled out the following principles governing the circumstances in which the excess amount cannot be recovered by the employer: “55. That apart, it also appears from the record produced before us that while the Finance Department of the Government of Bihar was in favour of making the amended provisions of FR. 22-C applicable to the appellants-teachers after having come to know that the said rule did not exist and had been substituted, the Department of Human Resource Development, Government of Bihar, wanted to apply the unamended provision to the appellants-teachers so as to make available the benefit of additional increment provided for under FR.22-C to its teachers, unaware of the fact that even under FR.22-C they were not entitled to the additional increment as they were not discharging duties and responsibilities of greater importance on the promoted post. 56. This further goes on to show that the authorities in the State of Bihar were not even aware of the basic requirement for grant of additional increment and the decision appears to have been taken without proper application of mind. Otherwise, there was no reason for the Finance Department to state in the counter affidavit filed before the High Court that any affidavit filed on behalf of the Education Department may be ignored as Finance Department was the competent authority. In this very affidavit, the Finance Department while admitting that the pay fixation by the Education Department was wrong, stated as under:- "...the fixation of pay under Fundamental Rule 22- C has wrongly been made as it was not in existence. Pay fixation on the basis of a nonexistent rule is a bona fide mistake." 57. This Court, in a catena of decisions, has granted relief against recovery of excess payment of emoluments/allowances if (a) the excess amount was not paid on account of any misrepresentation or fraud on the part of the employee and (b) 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. 58. The relief against recovery is granted by courts not because of any right in the employees, but in equity, exercising judicial discretion to relieve the employees from the hardship that will be caused if recovery is ordered. But, if in a given case, it is proved that the employee had knowledge that the payment received was in excess of what was due or wrongly paid, or in cases where the error is detected or corrected within a short time of wrong payment, the matter being in the realm of judicial discretion, courts may, on the facts and circumstances of any particular case, order for recovery of the amount paid in excess. See Sahib Ram vs. State of Haryana, 1995 Supp. (1) SCC 18, Shyam Babu Verma vs. Union of India, [1994] 2 SCC 521; Union of India vs. M. Bhaskar, [1996] 4 SCC 416; V. Ganga Ram vs. Regional Jt., Director, [1997] 6 SCC 139; Col. B.J. Akkara [Retd.] vs. Government of India & Ors. (2006) 11 SCC 709; Purshottam Lal Das & Ors.,vs. State of Bihar, [2006] 11 SCC 492; Punjab National Bank & Ors. Vs. Manjeet Singh & Anr., [2006] 8 SCC 647; and Bihar State Electricity Board & Anr. Vs. Bijay Bahadur & Anr., [2000] 10 SCC 99. 59. Undoubtedly, the excess amount that has been paid to the appellants - teachers was not because of any misrepresentation or fraud on their part and the appellants also had no knowledge that the amount that was being paid to them was more than what they were entitled to. It would not be out of place to mention here that the Finance Department had, in its counter affidavit, admitted that it was a bona fide mistake on their part. The excess payment made was the result of wrong interpretation of the rule that was applicable to them, for which the appellants cannot be held responsible. Rather, the whole confusion was because of inaction, negligence and carelessness of the officials concerned of the Government of Bihar. Learned counsel appearing on behalf of the appellants-teachers submitted that majority of the beneficiaries have either retired or are on the verge of it. Keeping in view the peculiar facts and circumstances of the case at hand and to avoid any hardship to the appellants-teachers, we are of the view that no recovery of the amount that has been paid in excess to the appellants-teachers should be made. 60. Learned counsel also submitted that prior to the interim order passed by this Court on 7.4.2003 in the special leave petitions, whereby the order of recovery passed by the Division Bench of the High Court was stayed, some installments/amount had already been recovered from some of the teachers. Since we have directed that no recovery of the excess amount be made from the appellant- teachers and in order to maintain parity, it would be in the fitness of things that the amount that has been recovered from the teachers should be refunded to them.” Accordingly, in view of the observations made hereinabove and the definitive law quoted above, the petition is allowed. Respondents are directed to pay the petitioner interest @ 9% per annum on the delayed pension with effect from 1.1.1991 to 6.9.1993 and also to release a sum of Rs. 41,580 of DCRG with interest @ 9%. Respondents are also directed not to recover balance sum of Rs. 17,002/- from the petitioner. No costs. (Rajiv Sharma), Judge 30.8. 2010 *awasthi*