IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE T.R.RAMACHANDRAN NAIR WEDNESDAY, THE 8TH JUNE 2011 / 18TH JYAISHTA 1933 OP.No. 5981 of 2002(K) ---------------------------- PETITIONER(S): -------------------- N.K. SREENIVASAN, HEADMASTER, KUTHUPARAMBA, U.P. SCHOOL, P.O. KUTHUPARAMBA, KANNUR DISTRICT. BY ADV. SRI.P.M.PAREETH RESPONDENT(S): -------------------- 1. STATE OF KERALA, REPRESENTED BY SECRETARY, GENERAL EDUCATION DEPARTMENT, GOVERNMENT OF KERALA, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM. 2. DEPUTY DIRECTOR OF EDUCATION, KANNUR. 3. ASSISTANT EDUCATIONAL OFFICER, KUTHUPARAMBA, KUTHUPARAMBA P.O., KANNUR DISTRICT. BY GOVT.PLEADER SRI.T.T.MUHAMOOD THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 08/06/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: svs O.P. NO. 5981/2002 APPENDIX PETITIONER'S EXHIBITS: P1: COPY OF AUDIT OBJECTION ISSUED BY THE SECOND RESPONDENT AND ENDORSED BY THE THIRD RESPONDENT. P2: COPY OF GOVERNMENT ORDER G.P.(P)NO.380/94/(13) DATED 09/06/1994. P3: COPY OF GOVERNMENT ORDER G.O.(P) NO.566/96(105)/FIN. DATED 11/09/1996. RESPONDENT'S EXHIBITS: NIL /TRUE COPY/ P.A. TO JUDGE. svs T.R. RAMACHANDRAN NAIR, J. ~~~~~~~~~~~~~~~~~~~~~~~~~~~ O.P. No.5981/2002-K ~~~~~~~~~~~~~~~~~~~~~~~~~~~ Dated this the 8th day of June, 2011 J U D G M E N T Herein the petitioner challenges Ext.P1 whereby an audit objection with regard to pay fixation has been communicated to him. 2. He entered service as L.P.S.A on 01/06/1971 at Kuthuparamba U.P School and was promoted as Headmaster on 01/04/1993. The petitioner was granted 25 years' selection grade notionally on 01/08/1996 which is the date opted by him after completion of 25 years of total service. Accordingly, his pay was fixed and that was approved also. After sanctioning subsequent increments, his pay was raised to Rs.8,200/- as on 01/08/2001. In Ext.P1, there is a direction to refund the excess pay drawn from 22/08/1994 onwards. 3. In the counter affidavit, it is explained that the Government introduced a new scale of pay to its employees and staff of Aided Schools with effect from 01/03/1992 as per G.O.(P).No.600/93/Fin., dated 25/09/1993 read with G.O.(P).No.930/93/Fin., dated 08/12/1993. The petitioner accordingly opted the O.P No.5981/2002 -:2:- revised scale with effect from 22/08/1994 and his pay was fixed at Rs.2,180/- in the revised scale of pay of Rs.1640-2900 as on 22/08/1994. Various fixations were also made. It is pointed out that the fixations are against Rule 4(a) of Rules for Fixation of Pay laid down in Annexure III to G.O.(P) No.600/93/Fin, dated 25/09/1993 as amended as per paragraph (7) of G.O.(P). No.930/93/Fin., dated 08/12/1993 and sub para C of para 2(II) of G.O.(P).No.380/94(13)/Fin., dated 09/06/1994. In paragraph (3) of the counter affidavit it is pointed out that as per the said orders, an employee will be permitted to opt the revised scale of the promoted post with effect from the date of promotion and his pay in the revised scale fixed on the basis of the pay he drew in the pre-revised scale of the promoted post on that date. Accordingly, it is mentioned that the option submitted is not liable to be accepted. 4. The learned counsel for the petitioner submitted that a very same issue was decided by this Court in Judgment in W.P.(C).No.25764/2006 in the case of another Headmaster. Evidently, the petitioner could have given an option only in the revised scale. O.P No.5981/2002 -:3:- Actually, what has happened is the acceptance of the option which was submitted in the pre-revised scale of the promoted post w.e.f 01/04/1993 and refixed w.e.f. 01/07/1993 in the pre-revised scale. The relevant Government Orders which permit submission of option, provides a particular method and the option which is not submitted in terms of the said provisions cannot survive. In that view of the matter, there cannot be any dispute that the audit objection is well founded and the fixation of pay which is against the Government Orders cannot survive. 5. Herein, the audit objection was raised after seven years and the pay scales were revised during this period also. The petitioner has retired from service. The learned counsel for the petitioner submitted that pensionery benefits have been sanctioned after scaling down the benefits in terms of the audit objections. It is further submitted that as the petitioner had enjoyed the benefits, a recovery at this stage cannot be justified. This aspect was considered in the Judgment in W.P.(C).No.25764/2006 in paragraph Nos.8 to 12 which are extracted below:- O.P No.5981/2002 -:4:- “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 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 O.P No.5981/2002 -:5:- 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 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 O.P No.5981/2002 -:6:- 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.” 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”. 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 O.P No.5981/2002 -:7:- 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 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.” O.P No.5981/2002 -:8:- 6. Adopting the same reasoning, this writ petition is also allowed to the extent of quashing the direction in Ext.P1 to recover the alleged excess amount from the D.C.R.G. It is submitted that already an amount of Rs.38,560/- is recovered from the D.C.R.G. There will be a direction to release the said amount of Rs.38,560/- within a period of two months from the date of receipt of a copy of this Judgment. No costs. Sd/- (T.R. Ramachandran Nair, Judge.) ms