IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. CWP(T) No.7794/2008 Decided on:5.6.2009 Mani Chand. …Petitioner. Versus Himachal Pradesh State Forest Corporation Limited and another. …Respondents. Coram The Hon’ble Mr. Justice Rajiv Sharma, J. Whether approved for reporting ?1.yes For the petitioner : Mr. D.P. Gupta, Advocate vice Mr. K.D. Shreedhar, Advocate. For the Respondents : Mr. R.K. Sharma, Sr. Addl. A.G. with Mr. Rajinder Dogra, Addl. A.G. and Mr. Ramesh Thakur, Asstt. Advocate General. Rajiv Sharma, J. The petitioner was appointed as Combatant Clerk in the Indian Army on 27.12.1960. He was discharged from Indian Army in the month of January, 1977. He was offered appointment as a Clerk in the Himachal Pradesh State Forest Corporation Limited. He accepted the same and joined his duties as a Clerk on 20.12.1979. He was granted benefit under FR 27 and his pay was fixed in the year 1982. He was given notional promotion to the post of Senior Assistant vide office order No.420/93-94 dated 4.3.1994. His pay was re-fixed on 1.5.2000 on the basis of the 1 Whether the reporters of Local Papers may be allowed to see the judgment? yes 2 instructions issued by the Head Office on 16.10.1999. He made a representation against this to the Managing Director of the respondent- corporation. The representation made by the petitioner was rejected as is evident from Annexure A-10 dated 18.9.2000. Vide memorandum dated 30.1.2001, the respondent-corporation had proposed that notional promotion given to the petitioner to the post of Senior Assistant vide letter dated 4.3.1994 may be withdrawn. He was permitted to file the representation within 30 days thereafter. He filed reply to the same on 20.2.2001. It appears from the record that his pay was again re-fixed vide Annexure A-15 dated 19.3.2001. The petitioner has superannuated on 31.12.2000. The corporation had released a sum of Rs. 1,09,544/- to the petitioner. However, a sum of Rs. 79,309 was withheld payable towards the gratuity. Mr. D.P. Gupta, Advocate has strenuously argued that Annexure A- 8, A-13 and A-15 are illegal and arbitrary, thus, violative of Articles 14 and 16 of the Constitution of India. He then argued that conscious decision has been taken by the corporation itself to fix the pay of the petitioner in the year 1982. He then contended that the petitioner was promoted to the post of Senior Assistant on 4.3.1994. Thereafter he discharged the duties of the higher post till the date of his retirement i.e. 31.12.2000. Mr. R.K. Sharma, learned Senior Additional Advocate General has argued that the petitioner was not at all entitled to the benefit of approved military service since he was recruited in the India Army before 1.11.1962. He then argued that the petitioner’s pay has been wrongly fixed and the same has also been revised vide Annexures A-8 and A-15 dated 1.5.2000 and 19.3.2001, respectively. He further contended that the promotion of the petitioner was erroneous since the petitioner had been wrongly given the benefit of approved military service. 3 I have heard the learned counsel for the parties and perused the pleadings carefully. The petitioner was appointed in the Indian Army before 1.11.1962. He was appointed as a Clerk in the respondent-corporation on 20.12.1979. He has been given the benefit of FR 27 on the basis of Annexure A-1 dated 19.10.1979 and his pay was fixed in the year 1982. This decision has been taken by the corporation at its own level. The petitioner has neither misled nor misrepresented the corporation. He has not played any fraud upon the corporation. It was only on 8.5.2000, his pay was re-fixed vide Annexure A-8. He was required to be heard before the issuance of Annexure A-8. However, the fact of the matter is that the petitioner made a representation against his re-fixation on 8.5.2000. It was rejected by the competent authority. He has superannuated on 31.12.2000. His pay has been re-fixed again after his retirement on 19.3.2001. The petitioner was granted the benefit of approved military service for the purpose of promotion. He was promoted as a Senior Assistant on 4.3.1994. He has worked against this post till his superannuation on 31.12.2000. He has been served with a memorandum on 30.1.2001 whereby he was permitted to file representation against the proposed withdrawal of promotion order dated 4.3.1994. He filed the present petition before the learned Himachal Pradesh Administration Tribunal on 7.6.2001. The learned Tribunal on 19.6.2001 stayed the operation of the order dated 30.1.2001 and 19.3.2001. It is true that the petitioner was recruited in the Indian Army before 1.11.1962. He was not entitled to the benefits arising out of the Demobilized Armed Forces Personnel (Reservation of Vacancies in Himachal State Non-Technical Services) Rules, 1972. In fact, this 4 question is no more res integra in view of the law laid down by their Lordships of the Hon’ble Supreme Court in State of Himachal Pradesh and another versus Piar Singh 2002 (6) SLR-24. This judgment was pronounced by the Hon’ble Supreme Court on 17.9.2002. The petitioner retired from the service before the pronouncement of this judgment on 31.12.2000. The benefit of approved military service has been granted to the petitioner by the corporation after receiving clarification from the Secretary, Rajya Sainik Board by fixing his pay under FR 27 in the year 1982 that too when he exercised his option. He started getting the higher salary with effect from the year 1982. It was only on 1.5.2000 that the decision has been taken to re-fix his salary. He was required to be afforded reasonable opportunity of being heard before re-fixation of his salary. The representation filed by the petitioner was rejected and his pay was re-fixed after his retirement on 19.3.2001. He was given notional promotion with effect from 4.3.1994 by giving him the benefit of approved military service of about 16 years. He has continuously worked against the post of Senior Assistant. He has retired from the service on 31.12.2000. The corporation had not taken any decision pursuant to Annexure A-13 dated 30.1.2001. He stands retired as Senior Assistant. The corporation has not released pensionery benefits as per the contents of the reply. The Tribunal had decided in Kali Dass case that the persons who are appointed before 1.11.1962 were also entitled to the benefits of these rules since according to the Tribunal, the cut off date fixed as 1.11.1962 was arbitrary. However, the Apex Court in 2002 (6) SLR-24 (supra) upheld the cut off date i.e. 1.11.1962 on 17.9.2002. In the meantime number of persons, including the petitioner, were given the benefit by the respondent at its own level. His pay was fixed in the year 1982 and was 5 promoted as Assistant on 4.3.1994. The petitioner has worked against the higher post. The respondent-corporation has also decided to effect recoveries from the retiral benefits of the petitioner. In these circumstances it would be harsh and oppressive if the respondent- corporation is permitted to reduce the salary of the petitioner and also to withdraw the promotion orders dated 4.3.1994 that too after his retirement on 31.12.2000. The effect of reduction of the salary will have a cascading effect on his retiral benefits as well. At the time when he retired, he was working as an Assistant. 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 6 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 non- existent 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. 7 (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 Accordingly in view of the observations made hereinabove, the petition is allowed. Annexures A-13 dated 13.1.2001 and A-15 dated 30.1.2001 are quashed and set aside. The respondents are directed to release the pensionery benefits to the petitioner within a period of eight weeks from today. No costs. 5.6. 2009 (Rajiv Sharma ), J. *awasthi*