Excess of entitlement while making mistakes in the payments to the employees: High Court of Shimla

 Hig h C o urt of H.P on 19 04 HCHP 1 HON’BLE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA CWPOA No. 1220 Decided on: 19.04.2021 Bahadur Singh .…......Petitioner Versus State of Himachal Pradesh and others ........Respondents ________________________________________________________ Coram: Ms. Justice Jyotsna Rewal Dua Judge Whether approved for reporting 1 For the petitioner : Mr. Prem P. Chauhan Advocate. For the respondents : Mr. Anil Jaswal Additional Advocate General with Mr. Amit Dhumal Deputy Advocate General. _________________________________________________________ Jyotsna Rewal Dua Judge The petitioner has challenged the action of respondents in ordering recovery of alleged excess wages paid to him for the period 31.03.2012 till 23.11.2012. 2 Facts 2(i) The petitioner was appointed as Part Time Water Carrier in respondent Education Department on 23.9.2002. On 22.08.2012 the Secretaryto the Government of Himachal Pradesh issued a letter in respect to conversion of Part Time Water Carriers as daily wagers. Relevant portion of this letter reads as under: 1 Whether reporters of Local Papers may be allowed to see the judgment Yes. Hig h C o urt of H.P on 19 04 HCHP 2 “I am directed to refer to the subject cited above and to say that the matter regarding policy for conversion of Part Time Water Carriers on daily wages in Education Department was under consideration of the Government for some time. Now it has been decided by the Government to regulate the services of Part Time Water Carriers of the Department of Education in the following manners: 1. The Part Time Water Carriers of the Department will be converted as Water Carriers cum Peon on daily waged basis after completion of 10 years of continuous service as per policy guidelines of Department of Personnel issued from time to time for all other State Govt. departments. This will be revised to the period of 9 years as and when the same is issued by the DOP. 2. 983 numbers of Whole Time Contingent Paid posts of the department will be converted upgraded as the regular Class IV employees. 3. The services of PTWCs converted as Water Carrier cum Peon on daily waged basis will be regularized as regular Class IV after completion of 8 years as per DOP policy issued from time to time for all other state Government department .” 2(ii) A policy dated 19.9.2012 regulating the services of Part Time workers provided following in respect of their conversion into daily wagers: “In continuation of this Department’s letter of even number dated 02.06.2012 I am directed to say that the matter regarding conversion of part time workers to daily wage basis was under active consideration of the Government for some time past. Now it has been decided by the Government that Part Time workers having completed nine years continuous service as on 31st March 2012 in all Govt. Departments will be converted to daily wager subject to the observance of the following terms and conditions: Part Time Class IV employees having completed nine years of continuous services as on 31st March 2012 will only be made daily wager Posts vacated by such part time employees shall stand abolished.The orders to this effect will be issued at the level of Head of Departments after verifying the facts.For the determination of date of birth of the candidate concerned criterion as laid down in Rule 7.1 of HPFR Vol I shall be observed.The conversion to daily wager status shall only be from prospective effect i.e. after the date the orders are issued after completion of all codal formalities ...” 2(iii) Petitioner a Part Time Water Carrier appointed on 23.09.2002 had admittedly completed nine years of continuous service by Hig h C o urt of H.P on 19 04 HCHP 3 31.3.2012. As per averments made in the reply he was given daily wage status w.e.f 23.11.2012. Arrears were paid to him w.e.f. 31.3.2012. Four years later i.e. on 24.6.2016 respondent No.2 directed respondent No.3 to scrutinize the matters in respect of any over payment in the form of arrears to those Part Time Water Carriers whose services were converted into that of daily wagers. On the basis of this communication respondent No.3 issued a recovery notice dated 27.7.2016directing respondent No.4 Block Elementary Education Officer concerned to recover the excess amount in lum sump from all such part time water carriers converted into daily wagers. Subsequent to this after verification respondent No.4 vide letter dated 9.8.2016directed Centre Head Teacher of the concerned schools to deposit the excess amount paid to the part time water carriers named therein within a week. In this communication name of the petitioner figured at Serial No.38. An amount of Rs.20 116 is stated to be recoverable from him on account of excess payment of wages to him for the period in question. The recovery notices communications dated 27.7.2016and 9.8.2016have been impugned in the present petition. 3. Learned counsel for the petitioner contended that services of the petitioner were required to be converted into daily wage basis w.e.f. 31.3.2012 and not w.e.f. 23.11.2012. The amount in question was therefore legitimately due towards the petitioner and was accordingly paid to him. Learned counsel further submitted that in any event there had been no Hig h C o urt of H.P on 19 04 HCHP 4 misrepresentation on part of the petitioner therefore in the facts of the case this amount could not be recovered from him. The amount in question was paid by the respondents themselves to the petitioner. In support of his contentions learned counsel relied upon4 SCC 334 titled State of Punjab and others Vs. Rafiq Masih and others. Learned counsel further submitted that similar recovery notices in various other cases of similar nature involving recovery of alleged excess payment of wages to Part Time Water Carriers on their conversion as daily wagers have been quashed and set aside by the erstwhile learned H.P. Administrative Tribunal. The orders passed by the learned Tribunal have been accepted by the respondents and recovery proceedings have been dropped. In support of this submission reliance was placed upon a list at Annexure D 1 and a judgment dated 14.9.2018 delivered by the Tribunal in OA No.304 2017. Learned Additional Advocate General on the basis of instructions imparted to him has not disputed this factual position. 4. Heard learned counsel for the parties and gone through the records. 5(i) The legal position in respect of recovery of amount by the employer allegedly paid to an employee in excess has been streamlined in4 SCC 334 titled State of Punjab and others Vs. Rafiq Masih and others. After noticing various precedents on the subject matter Hon’ble Apex Court held as under: Hig h C o urt of H.P on 19 04 HCHP 5 “18. It is not possible to postulate all situations of hardship which would govern employees on the issue of recovery where payments have mistakenly been made by the employer in excess of their entitlement. Be that as it may based on the decisions referred to herein above we may as a ready reference summarise the following few situations wherein recoveries by the employers would be impermissible in law:Recovery from employees belonging to Class III and Class IV serviceRecovery from retired employees or employees who are due to retire within one year of the order of recovery.Recovery from employees when the excess payment has been made for a period in excess of five years before the order of recovery is issued.Recovery in cases where an employee has wrongfully been required to discharge duties of a higher post and has been paid accordingly even though he should have rightfully been required to work against an inferior post.In any other case where the Court arrives at the conclusion that recovery if made from the employee would be iniquitous or harsh or arbitrary to such an extent as would far outweigh the equitable balance of the employer s right to recover.” 5(ii) In14 SCC 267 titled High Court of Punjab and Haryana and Others Vs. Jagdev Singh Hon’ble Apex Court after noticing the judgment in Rafiq Masih’s caseheld that there is no bar in ordering recovery from the retired employees or employees who are due to retire within one year of the order of recovery in case the officer to whom the payment was made in the first instance was given notice that any payment found to have been made in excess would be required to be refunded. It is also significant to notice that in Jagdev Singh’s case the officer concerned had furnished an undertaking to refund the excess payment if any. In such situation it was observed by the Court as under: “9. The submission of the Respondent which found favour with the High Court was that a payment which has been made in excess cannot be recovered from an employee who has retired from the service of the state. This in our view will have no application to a situation such as the present where an undertaking was specifically furnished by the officer at the time when his pay was initially revised accepting that any payment found to have been made in excess would be liable to be adjusted. While opting for the benefit of Hig h C o urt of H.P on 19 04 HCHP 6 the revised pay scale the Respondent was clearly on notice of the fact that a future re fixation or revision may warrant an adjustment of the excess payment if any made. 11. The principle enunciated in propositionabove cannot apply to a situation such as in the present case. In the present case the officer to whom the payment was made in the first instance was clearly placed on notice that any payment found to have been made in excess would be required to be refunded. The officer furnished an undertaking while opting for the revised pay scale. He is bound by the undertaking.” 5(iii) The relief against recovery is granted by the 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 in a given case if 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 in the facts and circumstances of any particular case order for recovery of the amount paid in excessSCC 475 titled Syed Abdul Qadir & Ors Vs. State of Bihar & Ors.] 5(iv) In the instant case the petitioner was serving as Part Time Water Carrier w.e.f. 23.9.2002. His services were required to be converted into daily waged basis in terms of the applicable Government Policy on completion of nine years continuous service in accordance with law. It is not in dispute that the petitioner had completed nine years continuous service as Part Time Water Carrier by 31.3.2012. As per un controverted reply petitioner’s part time services were converted into daily wage basis w.e.f. 23.11.2012. Arrears on that count were paid to him w.e.f. 31.3.2012. It is not the case of the respondents that the petitioner had misrepresented regarding any relevant factual position. Arrears on Hig h C o urt of H.P on 19 04 HCHP 7 account of conversion of the petitioner’s part time services as daily wage were paid by the respondents themselves to the petitioner w.e.f. 31.3.2012. Even without going into the admissibility of the amount in question to the petitioner w.e.f. 31.3.2012 it can be safely concluded that the case of the petitioner squarely falls within category of Paragraph 18(i) of the Rafiq Masih’s caseand dated 9.8.2016are quashed and set aside. Accordingly the present writ petition stands disposed of so also pending miscellaneous application(s) if any. Jyotsna Rewal Dua Judge April 19 2021(rohit) 

Summary: It is not possible to postulate all situations of hardship, which would govern employees on the issue of recovery, where payments have mistakenly been made by the employer, in excess of their entitlement. This honorable judgement was passed by High Court of Shimla in the case of Bahadur Singh Versus State of Himachal Pradesh and others [CWPOA No. 122 of 2020] by The Hon’ble Ms. Justice Jyotsna Rewal Dua, Judge. The petitioner had challenged the action of respondents in ordering recovery of alleged excess wages paid to him for the period 31.03.2012 till 23.11.2012. The petitioner was appointed as Part Time Water Carrier in respondent-Education Department, the Secretary to the Government of Himachal Pradesh issued a letter in respect to conversion of Part Time Water Carriers as daily wagers. Petitioner had admittedly completed nine years of continuous service by. As per averments made in the reply, he was given daily wage status w.e.f 23.11.2012. Arrears were paid to him w.e.f. 31.3.2012. Four years later, respondent directed other respondent to scrutinize the matters in respect of any over payment in the form of arrears to those Part Time Water Carriers, whose services were converted into that of daily wagers. On the basis of this communication, respondent issued a recovery notice, directing Block Elementary Education Officer concerned to recover the excess amount in lum sump from all such part time water carriers converted into daily wagers. Subsequent to this, after verification, respondent vide letter directed Centre Head Teacher of the concerned schools to deposit the excess amount paid to the part time water carriers named therein, within a week. In this communication, name of the petitioner figured at Serial No.38. An amount of Rs.20,116/- is stated to be recoverable from him on account of excess payment of wages to him for the period in question. In support of his contentions, learned counsel relied upon (2015) 4 SCC 334 titled State of Punjab and others Vs. Rafiq Masih and others, State of Punjab and others Vs. Rafiq Masih and other, High Court of Punjab and Haryana and Others Vs. Jagdev Singh and Syed Abdul Qadir &amp; Ors Vs. State of Bihar &amp; Ors. The court opinioned that, “It is not the case of the respondents that the petitioner had misrepresented regarding any relevant factual position. Arrears on account of conversion of the petitioner’s part time services as daily wage, were paid by the respondents themselves to the petitioner. Even without going into the admissibility of the amount in question to the petitioner, it can be safely concluded that the case of the petitioner squarely falls within category of the Rafiq Masih’s case (supra).”