IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE T.R.RAMACHANDRAN NAIR MONDAY, THE 28TH FEBRUARY 2011 / 9TH PHALGUNA 1932 WP(C).No. 25764 of 2006(P) ---------------------------------- PETITIONER: ------------------- P.P.ABOOTTY, HEADMASTER (RETIRED), M.M.I.L.P.S. KALLAYI, PALAKKEEL HOUSE, P.O. ANCHARAKANDY, KANNUR DISRICT. BY ADV. SRI.P.M.PAREETH SMT.C.C.JANCY SRI.MOHAMMED SHAMEEL RESPONDENTS: ----------------------- 1. STATE OF KERALA REPRESENTED BY SECRETARY FINANCE DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM. 2. ASSISTANT EDUCAIONAL OFFICER, MATTANUR, KANNUR DISTRICT. 3. ACCOUNTANT GENERAL, THIRUVANANTHAPURAM. 4. SUB TREASURY OFFICER, KUTHUPARAMBA, KANNUR DISTRICT. BY GOVERNMENT PLEADER SHRI.MOHAMMED FAZIL THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 28/02/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ...2/- WPC NO.25764 OF 2006 (P) --2-- APPENDIX PETITIONER'S EXHIBITS EXT.P1:- COPY OF THE OPTION DATED 6-9-94 SUBMITTED BY THE PETITIONER. EXT.P2:- COPY OF THE STATEMENT OF FIXATION DATED 6-9-94. EXT.P3:- COPY OF THE AUDIT OBJECTION DATED 14-7-2000 ISSUED BY THE SECOND REPONDENT TO THE PETITIONER. EXT.P4:- COPY OF THE REPRESENTATION FOWARDED TO THE FIRST REPONDENT, LETTER NO.F 126/04 BY THE SECOND RESPONDENT DATED 4-1-04. EXT.P5:- COPY OF THE LETTER NO.60658/PRU.1/2004/Fin DATED 17-9-04 SENT BY FIRST RESPONDENT TO THE PETITIONER. EXT.P6:- COPY OF THE PENSION PAYMENT ORDER DATED 11-1-05. EXT.P7:- COPY OF THE G.O(P) NO.380/94 DATED 9-4-94. EXT.P8:- COPY OF THE G.O.(P) No.1811/99/38/Fin DATED 15-9-99. EXT.P9:- COPY OF THE JUDGMENT DATED 24-3-06 IN W.P.(C) NO.5017/05 OF THIS HON'BLE COURT. EXT.P10:-COPY OF THE GOVT. LETTER NO. 18843/PRU.1/05/Fin. DATED 5-8-06 SENT BY FIRST RESPONDENT TO THE PETITIONER. RESPONDENTS EXHIBITS:- NIL //TRUE COPY// P.A. TO JUDGE KRK T.R. RAMACHANDRAN NAIR, J. --------------------------------------- W.P.(C) No.25764 OF 2006 --------------------------------------- Dated this the 28th day of February, 2011. J U D G M E N T In this writ petition, the petitioner challenges Exhibit P10 communication by which it was directed that the recovery ordered is proper and the petitioner will have to refund an amount of Rs.37,931/- already released to him. 2. The petitioner herein retired from service as Headmaster of M.M.I.L.P school, Kallayi on 30.04.2004. He was promoted as Headmaster on 01.04.1990. At that time, the petitioner was not granted Senior Grade and Selection Grade of PD Teacher. The same fell due on 26.06.1992 and 26.06.1997. The petitioner opted to continue in the pre-revised scale upto 30.06.1992 and an option was submitted as per Exhibit P1 dated 06.09.1994. The pay was revised as on 01.07.1992 in the revised scale of Rs.1640-2900. This is evident from Exhibit P2. Again his pay was fixed at Rs.2150 as on 01.07.1997 while granting Selection Grade. The petitioner was granted the benefit of 1997 pay W.P.(C) No.25764/2006 2 revision also. The fixation of pay scales have been approved by the 2nd respondent and by the Deputy Director of Education, Kannur. 3. After eight years, an audit objection was raised which was communicated to the petitioner as per Exhibit P3. The scale of pay fixed, was objected. The petitioner approached the 2nd respondent and a further representation was filed before the 1st respondent as per Exhibit P4. The petitioner approached this Court by filing W.P.(C) No.16549/2004 wherein this Court directed the 1st respondent to dispose of the representation. Exhibit P5 is the communication issued thereafter which is adverse to the petitioner. The pensionary benefits were disbursed to him after recovering an amount of Rs.1,13,794/- from the DCRG. 4. The petitioner again approached this Court by filing W.P.(C) No.5017/2005. This Court quashed all the orders as per Exhibit P9 judgment with a further direction to refund an amount of Rs.37,931/- to the petitioner from out of the withheld amount of DCRG. This direction was issued by taking the view that, W.P.(C) No.25764/2006 3 nobody had a case that the wrong fixation was done on the basis of any misrepresentation or fraud committed by the petitioner and that the recovery of entire excess amount paid from 1992 to 2004 will not be justified. The Government was directed to consider these aspects and pass a fresh order. The 1st respondent later released an amount of Rs.37,931/- to the petitioner. Again his claim was rejected as per Exhibit P10 with a further direction to refund Rs.37,931/- also, which is under challenge in this writ petition. 5. It is the case of the petitioner that the fixation made under the pre revised scale was proper. It is further pointed out that those teachers who continued without promotion as Headmaster were eligible to opt pre revised scale and they got the benefits of fixation under Rule 28A Part I KSR. It is stated that the particular stipulation under the Government Order dated 09.06.1994 produced as Exhibit P7 has contributed to the hardship of the petitioner. 6. It is further pointed out that, at any rate the recovery ordered in Exhibit P10 cannot be supported in the light of various W.P.(C) No.25764/2006 4 decisions of this Court and the Apex Court namely, Registrar of Co-operative Societies vs. Israil Khan (2009 (4) KLT SN 61 (C.No.53) SC) and Syed Abdul Qadir and others vs. State of Bihar and others [(2009) 3 SCC 475]. Reliance is also placed on the judgment of this Court in W.P.(C) No.17055/2005 wherein these judgments have been followed. 7. The 1st respondent has filed a counter affidavit justifying the action taken. Evidently, going by paragraph (c) of Exhibit P7, the petitioner could have opted the pay only in the revised scale. The option was submitted in the pre revised scale which was accepted and sanctioned. Orders like Exhibit P7 are executive orders which are brought from time to time at the time of pay revision. The method adopted in Exhibit P7 cannot be faulted in the light of the fact that the Government wanted to fix the scale of pay in respect of the persons who have already been promoted as Headmasters at the time of pay revision. May be that, some teachers who continued without getting promotion obtained more benefit by opting the pre revised scale. In that sense, it has caused some hardship to the petitioner. But, the fixation at that W.P.(C) No.25764/2006 5 point of time was done overlooking the relevant clauses in Exhibit P7. Therefore, the audit objection cannot be said to be wrong. But, it appears that the audit objection was raised only after eight years. During this period pay was revised again. The petitioner has already retired from service. In the light of Exhibit P9 judgment, an amount of Rs.37,931/- has been refunded from out of the recovered amount of Rs.1,13,794/-. 8. Both sides relied on various judgments in support of their pleas. Learned Government Pleader placed reliance upon the decisions of the Division Bench of this Court in Santhakumari vs. State of Kerala (2005(4) KLT 649) and in Writ Appeal No.288/2005 and the decision of another Division Bench of this Court in R.P.No.608/2006. The decisions relied upon by the petitioner which are judgments of the Apex Court lay down the principle that if an employee has received excess payment which is later objected and if the employee has not contributed to the fixation by any misrepresentation, fraud or collusion, the courts can use their discretion to deny the right to recover the excess payment. The said dictum as evident from W.P.(C) No.25764/2006 6 Registrar of Co-operative Societies vs. Israil Khan (2009 (4) KLT SN 61 (C.No.53) SC) lays down thus: “Such relief, restraining recovery back of excess payment is granted by courts not because of any right in the employees, but in equity, in exercise of judicial discretion, to relieve the employees, from the hardship that will be caused if recovery is implemented. A Government servant, particularly one in the lower rungs of service would spend whatever emoluments he received for the upkeep of his family. If he receives an excess payment for a long period, he would spend it genuinely believing that he is entitled to it. As any subsequent action to recover the excess payment will cause undue hardship to him, relief is granted in that behalf. But where the employee had knowledge that the payment received was in excess of what was due or wrongly paid, or where the error is detected or corrected within a short time of wrong payment, Courts will not grant relief against recovery. The matter being in the realm of judicial discretion, courts may on the facts and circumstances of any particular case refuse to grant such relief against recovery. What is important is recovery of excess payments from employees is refused only where the excess payment is made by the employer by applying a wrong method or principle for calculating the pay/allowance, or on a particular interpretation of the applicable rules which is subsequently found to be erroneous. But where the excess payment is made as a result of any misrepresentation, fraud or collusion, courts W.P.(C) No.25764/2006 7 will not use their discretion to deny the right to recover the excess payment.” 9. In Syed Abdul Qadir and others vs. State of Bihar and others [(2009) 3 SCC 475], a similar question was considered. The legal position was reiterated in paragraphs 57 and 58 in the following terms: “There are several precedents of the Supreme Court where relief has been granted against recovery of excess payment of emoluments/allowances if (a) the excess amount was not paid on account of any misrepresentation or fraud on he part of the employee, and (b) if such excess payment was made by the employee 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. 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 ad circumstances of any particular case, order for recovery of the amount paid in excess.” W.P.(C) No.25764/2006 8 10. The above two decisions were followed in W.P.(C)No. 17055/2005 and the recovery was held to be barred. Of course, learned Government Pleader submitted that this Court in various decisions relied on by him held that if a mistake has contributed to the fixation of pay, the employee should not get the benefit of mistake. In Writ Appeal No.1510/2006, it was also held that if there is an undertaking given by the employee agreeing for recovery of the amount if subsequently it is found that the fixation is wrong, the recovery cannot be said to be barred. Learned Government Pleader also relied upon Rule 3C of Part III KSR which is stated as follows: Rule 3C: “Notwithstanding anything contained in these rules, recovery of excess payments made to an officer by mistake within a period of four years before his retirement and which are detected within a period of four years after retirement may be made from his pension and other amounts due to him after retirement subject to the condition that such deduction if made from his pension shall be effected only in monthly instalments in whole rupees and that the amount of each instalment shall not exceed 10 percent of the monthly pension admissible to him”. W.P.(C) No.25764/2006 9 11. Going by the above Rule, even if excess payment is by a mistake, recovery can be effected of the amount paid for a period of four years before the date of retirement. 12. In the light of the binding decisions of the Apex Court in Registrar of Co-operative Societies vs. Israil Khan (2009 (4) KLT SN 61 (C.No.53) SC) and in Syed Abdul Qadir and others vs. State of Bihar and others [(2009) 3 SCC 475], I am of the view that the recovery ordered against the petitioner in this case cannot be supported. The option given by the petitioner was accepted and the pay fixation was made and he was granted the benefit also. It is only after eight years, audit came with an objection. The petitioner retired from service way back in the year 2004. Therefore, it will be hard to recover an amount of Rs.1,13,794/- from DCRG at this distance of time. There is no allegation that there was any collusion, mis representation or fraud from the part of the petitioner. Therefore, the dictum laid down by the Apex Court in Registrar of Co-operative Societies vs. Israil Khan (2009 (4) KLT SN 61 (C.No.53) SC) and in Syed Abdul Qadir and others vs. State of Bihar and W.P.(C) No.25764/2006 10 others [(2009) 3 SCC 475] will squarely apply to the facts of this case. In Exhibit P9 judgment, this Court in paragraph 8 held that recovery of the entire amount paid as excess to the writ petitioner during the period from 1992 to 2004 will not be justified. The said finding has become final. The direction to the Government to reconsider the matter was issued in the light of the above finding. In that view of the matter, this writ petition is allowed. Exhibit P10 is quashed to the extent of the direction to recover the alleged liability from DCRG. There will be a direction to refund an amount of Rs.75,863/- which was recovered from the DCRG of the petitioner within a period of two months from the date of receipt of a copy of this judgment. No costs. T.R. RAMACHANDRAN NAIR JUDGE smp