IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. CWP(T) No. 15822 of 2008. Decided on: 6th August, 2010. Kashmir Singh. …Petitioner. -Versus- State of Himachal Pradesh & another. …Respondent. Coram: The Hon’ble Mr. Justice Rajiv Sharma, Judge. Whether approved for reporting?1 Yes. __________________________________________________________ For the petitioner. : Mr. Jagdish Thakur, Advocate. For the respondents. : Mr. R.K. Sharma, Senior Additional Advocate General with Mr. P.M. Negi, Deputy Advocate General and Mr. R.P. Singh, Assistant Advocate General. ---------------------------------------------------------------------------------------- Rajiv Sharma, Judge (Oral): Material facts necessary for adjudication of this petition are that the petitioner was appointed as Patwari in the year, 1972. He was subsequently promoted as Kanungo and thereafter was further promoted as Assistant Consolidation Officer in the year, 1995. He was granted step-up w.e.f. 02.04.1996 since one Shri Inder Ram, who was also Assistant Consolidation Officer, was junior to the petitioner being appointed on 02.04.1996. The pay of the petitioner was fixed at Rs.2270/- w.e.f. 02.04.1996, which was revised to Rs.7000/-. The petitioner was served with a notice dated 28.06.2006, whereby he was permitted to file reply within a period of fifteen days why the step up given to him be not taken back . He was directed to file reply within a period of ten days. Petitioner filed the reply on 10.07.2006. He reiterated that 1 Whether the reporters of the local papers may be allowed to see the judgment? Yes. he was rightly granted the step up as Shri Inder Ram has joined as A.C.O. w.e.f. 26.05.1996, whereas the petitioner has joined as A.C.O. in the year 1995. However, the Settlement Officer, Consolidation Department without taking into consideration the reply furnished by the petitioner, ordered the recovery for a sum of Rs.81174/- w.e.f. 01.04.2001 to 09.09.2005. 2. Mr. Jagdish Thakur, learned counsel for the petitioner has strenuously argued that the decision to step up the pay of the petitioner was rightly taken by the respondents since one Shri Inder Ram who was junior to the petitioner, was drawing higher salary. He then contended that the petitioner has neither misled nor mis-represented or played any fraud at the time of grant of step-up w.e.f. 02.04.1996. He lastly contended that the action has been taken by the respondents to effect the recoveries from the petitioner without taking into consideration the reply furnished by his client vide Annexure A-2, dated 10.07.2006. 3. Mr. R.K. Sharma, learned Senior Additional Advocate General has supported the issuance of order dated 20.09.2007 (Annexure A-5). 4. I have heard the learned counsel for the parties and gone through the record carefully. 5. The respondents have not denied in the reply that the petitioner was senior to Shri Indar Ram, Assistant Consolidation Officer. Petitioner was appointed as Assistant Consolidation Officer in the year 1995, whereas Shri Inder Ram was appointed as Assistant Consolidation Officer on 26.05.1996. A conscious decision has been taken by the respondent-State to grant the petitioner step-up w.e.f. 02.04.1996. However, the decision to re- fix the salary of the petitioner has been taken by the respondent- department after a period of ten years by issuing a notice to him on 28.06.2006. He filed reply to the same on 10.07.2006, as noticed above. The impugned order has been passed by the competent authority on 20.09.2007. It is evident that the reply filed by the petitioner has not been taken into consideration by the Settlement Officer, Consolidation Department before the issuance of Annexure A-5, dated 20.09.2007. 6. Mr. R.K. Sharma, learned Senior Additional Advocate General has also argued that the decision to re-fix the salary of the petitioner has been taken on the basis of instructions dated 07.03.1991 and 21.09.1999, respectively. However, fact of the matter is that the petitioner has neither mis-led nor mis-represented or played any fraud upon the authorities at the time of granting him the step-up. 7. The controversy involved in this case is no more res integra in view of the law laid down by their lordships of the Hon’ble Supreme Court in Syed Abdul Qadir and others versus State of Bihar and others, (2009) 3 SCC 475. Their lordships 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.” 8. Moreover, in the present case, the reply furnished by the petitioner has not been taken into consideration while issuing the impugned order dated 20.09.2007 (Annexure A-5). The petitioner has retired on 31.03.2008. He has suffered civil and evil consequences. The order dated 20.09.2007 has not been passed by the competent authority strictly in conformity with the principles of natural justice. 9. Accordingly, in view of the observations made hereinabove, the petition is allowed. Annexure A-5, dated 20.09.2007 is quashed and set aside. Respondents are directed to release the retiral/pensionary benefits to the petitioner within a period of ten weeks from the date of production of a certified copy of this judgment, if not already paid. No costs. (Rajiv Sharma) Judge August 06, 2010. (bhupender)