IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HON'BLE THE CHIEF JUSTICE MR.H.L.DATTU & THE HONOURABLE MR. JUSTICE K.M.JOSEPH TUESDAY, THE 29TH JANUARY 2008 / 9TH MAGHA 1929 WA.No. 1678 of 2005 ---------------------------- AGAINST THE JUDGEMENT IN OP.10704/2002 DATED 7.4.2005 .................... APPELLANTS/RESPONDENTS: ------------------------------------------- 1. THE DEPUTY DIRECTOR OF EDUCATION, KOZHIKODE. 2. THE ASSISTANT EDUCATIONAL OFFICER, KOZHIKODE. 3. THE STATE OF KERALA, REP. BY ITS SECRETARY, EDUCATION DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM. BY GOVERNMENT PLEADER MR.M.P.SREEKRISHNAN RESPONDENT/PETITIONER: ---------------------------------------- K.K. JUGUNU, CHYTHARAM, WEST NALLUR P.O., FEROKE, KOZHIKODE. BY ADV. SRI.P.V.KUNHIKRISHNAN THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 29/01/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: H.L.DATTU, C.J. & K.M.JOSEPH, J. ------------------------------------------ W.A.No.1678 of 2005 ------------------------------------------ Dated, this the 29th day of January, 2008 JUDGMENT K.M.Joseph, J. Respondents in O.P.No.10704 of 2002 are the appellants. The writ petition was filed with a prayer to quash Ext.P1 and also for a declaration that no amount can be deducted from the pensionary benefits of the writ petitioner (hereinafter referred to as 'the petitioner'), based on Ext.P1 audit remarks. 2. The petitioner joined service as a primary school teacher in 1967 and she became Headmistress with effect from 1.6.1992. She retired from service on 31.3.2002. The pay of the petitioner came to be notionally fixed in the pre-revised scale at Rs.1990/- in the Primary Teachers' Selection Grade scale of Rs.1250 – 2230. Consequently, her pay as Headmistress was fixed at Rs.2150/- in the scale of pay of Rs.1330 – 2555 based on the pay revision order of the Government with effect from 1.7.1997. After the pay revision, the scale of pay of the petitioner was refixed at Rs.2420/- in the revised scale of Rs.1600 – 2600 with effect from 1.7.1995. Petitioner had drawn her salary on the basis of the above fixation in the pre-revised scale. This came to be objected by the Audit department and in view of the audit objection the petitioner was directed by Ext.P1 to refund a sum of Rs.94,927/-. Petitioner offered her explanation as is evident from Ext.P2 which is a rectification report on the audit remarks of the Deputy Director of Education. In the explanation the petitioner also pointed out that she is not in a position to repay such a huge amount and she prayed that her pay fixation may be regularised and the objection raised by the Audit may be dropped. The petitioner also relied on Ext.P3 Government order. W.A.No.1678 of 2005 2 3. The learned Single Judge took the view that there was no mis- representation in the matter of refixation of her salary and that there was no allegation of fraud or foul play on the part of the petitioner. The learned Single Judge also took the view that petitioner was paid salary at the pre-revised and revised scales for nearly ten years without any objection from the Audit department. Her salary was revised and fixed in the light of the pay revision order and she continued to get salary till her retirement on 31.3.2002. The Court also took the view that in the absence of any material to show that the petitioner had managed to draw salary after committing any fraud or act of misrepresentation the respondents are not justified in effecting recovery and that too after a long lapse of time. Therefore, the writ petition was allowed and Ext.P1 was quashed. 4. Aggrieved by the said judgment, the respondents in the writ petition have filed the present appeal. 5. Heard Sri.M.P.Sreekrishnan, learned Government Pleader appearing for the appellants and Sri.P.V.Kunhikrishnan, learned counsel appearing for the respondent. 6. Learned Government Pleader would point out that even if it is true that there was no misrepresentation or fraud committed by the writ petitioner in the matter of fixation of her pay, it is not the law that the amounts paid on account of a mistaken fixation cannot be recovered. In this context he drew our attention to a Bench decision of this Court in Santhakumari v. State of Kerala (2005 (4) KLT 649). Therein the Division Bench after taking note of the conflicting decisions in the matter has considered the question and took the following view: W.A.No.1678 of 2005 3 “5. In our view, if an employee has received any amount contrary to a statutory provision the mistake is mutual since the administration as well as the employee is bound by the statutory provision. Paying and receiving the amount contrary to the statutory provision is illegal. When a mistake is mutual that has to be shared by both the parties. Law would nullify such an action if the parties are mistaken on the same fact situation. In a case where the mistake is mutual, both the parties act on the same mistaken assumption. Person who pays the amount is on the legitimate belief that the person who receives the amount is entitled to receive it and the person who receives the amount is on the belief that he is entitled to receive the same. Mistake in such a situation, in our view, is mutual. Consequently same has to be set right in public interest unless there is statutory bar in recovering the amount. 6. Principle laid down by the learned Judge in Sivankutty Nair's case (2005 (3) KLT 512), in our view cannot be of general application. Reasoning of the learned single Judge that the excess amount paid on account of wrong fixation of pay cannot be recovered unless the employee has in any way contributed to the mistake, in our view, is an over statement of law. We may hasten to add, unless there is statutory bar in recovering the amount, any amount paid by mistake could be recovered depending upon the facts and circumstances of each case. To hold that only in a case where employee has contributed to the mistake amount could be recovered cannot be sustained. Facts situation may warrant a sympathetic consideration but cannot be accepted as a general principle of law.” 7. Learned Government Pleader would also contend that the reasoning W.A.No.1678 of 2005 4 and the consequential conclusion of the learned Single Judge are both unsustainable being contrary to the aforesaid Bench decision of this Court. 8. Learned counsel appearing for the respondent would point out that the Bench decision was pronounced subsequent to the judgment of the learned Single Judge. Learned counsel, on the other hand, would draw our attention to the decision of the apex Court reported in Aleyamma Varghese v. Secretary, General Education Department and others (I.L.R. 2007 (3) Ker.105). Therein also the apex Court was considering a case of recovery from pay effected by the State on account of a subsequent discovery of mistaken payment. In that case, the apex Court proceeded to hold as follows: “A mistake apparent on the face of the record may be rectified but in a matter of this nature, we would expect the State to react more magnanimously and not resort to recovery proceedings after a period of 17 years. We, therefore, in the peculiar facts and circumstances of this case, are of the opinion that with a view to do complete justice to the parties, the amount sought to be recovered may not be recovered from the appellant and we direct accordingly. The impugned judgment is set aside and the appeal is allowed with the aforesaid observations and directions.” 9. Learned counsel for the respondent also drew our attention to the decision of a learned Judge of this Court reported in Shamsuddin v. State of Kerala (2004 (2) KLT 1020). The question that arose for consideration in the said case was whether the excess payment should be one made during the period of four years prior to the retirement of the employee. Therein the learned Judge was considering a case under Rule 3C of Part III of the Kerala Service Rules. The Court took the view that it is not enough that the excess W.A.No.1678 of 2005 5 payment is detected within four years of retirement. 10. As far as the decision of the apex Court relied on by the learned counsel for the respondent is concerned, we notice that, that was a case where the apex Court set aside the judgment of this Court apparently with reference to its powers under Article 142 of the Constitution. This conclusion is inevitable in view of the fact that the Court has held that it is to do complete justice to the parties that the Court was interfering with the judgment of this Court. Further, we notice that the Court has not laid down any principle of law which can be called as a precedent within the meaning of Article 141 of the Constitution. As far as the decision of the learned Single judge in Shamsuddin's case (supra) is concerned, we notice that, that was a case where the question which arose for consideration was the interpretation of Rule 3C of Part III of the Kerala Service Rules which permits recovery from the pension of an employee in respect of mistaken payment made within four years of the retirement. 11. The mistake in the present case was discovered in the year 2001 as Ext.P1 is of the year 2001. Therefore, discovery of the mistake was made in the year 2001 and that is much prior to the date of retirement of the respondent, that is 31.3.2002. 12. The learned counsel appearing for the respondent would also refer to the observation made by the Division Bench of this Court in paragraph 6 of the judgment and contend that the principle has to be applied case by case and on evaluation of facts present in each case. 13. We would think that the writ petition was filed in the year 2002. Ext.P1 is of the year 2001. The respondent offered her explanation as is W.A.No.1678 of 2005 6 evident from Ext.P2. There is no case for either party that a decision was taken on the explanation offered by the respondent. In such circumstances, we would think that a decision on the objection of the respondent was called for and without waiting for a decision on the same the respondent approached this Court with the writ petition. 14. In such circumstances we dispose of the writ appeal as follows: i) Writ appeal is disposed of. ii) The first appellant will now consider the objection filed by the respondent to Ext.P1 and take a decision thereon in accordance with law. We also make it clear that it is open to the respondent to raise any further objection as supplemental objection to Ext.P1 within a period of two weeks from the date of receipt of a copy of this judgment. iii) The objection filed by the respondent to Ext.P1 as also any supplemental objection as the respondent may file as permitted by this Court in this Judgment will be considered by the first appellant and a decision taken thereon within a period of two months from the date of receipt of a copy of this judgment. (H.L.DATTU) CHIEF JUSTICE (K.M.JOSEPH) JUDGE vns