IN THE HIGH COURT OF DELHI AT NEW DELHI
V. Kameswar Rao, Anoop Kumar Mendiratta, JJ.
Chairman, Delhi Transport Corporation – Appellant
Versus
Ramji Lal – Respondent
W.P.(C) 1160 of 2019, CM APPL. 5240 of 2019 (interim stay)
Decided On : 08-05-2023
Recovery - Central Administrative Tribunal - State of Punjab & Ors. vs. Rafiq Masih & Ors. - 2014(8) SCALE 613
Fact of the Case:
The case involves a challenge to the recovery of excess payments from the salary and terminal benefits of the respondent, based on a wrong fixation of salary in 2009, which was corrected in 2014. The recovery was made in 2014-2015 and at the time of the respondent's retirement in 2016.
Finding of the Court:
The court found that the recovery of the excess payments was impermissible under the judgment of the Supreme Court in State of Punjab vs. Rafiq Masih, as it fell within the situations where recovery cannot be effected.
Issues: The issues revolved around the legality of the recovery of excess payments and the timing of the recovery in relation to the fixation of salary and the respondent's retirement.
Ratio Decidendi: The court held that the recovery of excess payments from the salary and terminal benefits was impermissible under the judgment of the Supreme Court in State of Punjab vs. Rafiq Masih, as it fell within the situations where recovery cannot be effected.
Final Decision: The court dismissed the petition and upheld the order of the Tribunal, directing the refund of the recovery and granting liberty to re-examine the exact last basic pay drawn by the respondent and get his pension fixed correctly.
JUDGMENT
V. Kameswar Rao, J. (Oral)--The challenge in the Writ Petition is to an order dated September 12, 2018 passed by the Central Administrative Tribunal (in short `Tribunal') in O.A. 4308/2017, whereby the Tribunal has disposed of the Original Application by stating in paragraphs 5.3 and 5.4 as under:
"5.3 Per contra, respondents' case is that the applicant was erroneously granted the higher grade pay, due to which said recovery was made. As far as the recovery aspect is concerned, the same is squarely covered by the judgment of the Hon'ble Supreme in the case of Rafiq Masih (supra). The said excess payment was not on account of any fraud or misrepresentation by the applicant. The recovery made from the applicant, therefore, falls with the following categories, which have been held to be impermissible in law, as per the afore-mentioned judgment:
"12. 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:
(i) Recovery from employees belonging to Class-Ill and Class-IV service (or Group 'C' and Group 'D' service).
(ii) Recovery from retired employees, or employees who are due to retire within one year, of the order of recovery.
(iii) 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.
(iv) 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 hove rightfully been required to work against an inferior post.
(v) 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."
There cannot be any ambiguity that the judgment of Hon'ble Supreme Court in the case of Rafiq Masih (supra) is law of the land and applicable to everyone. I, therefore, hold that the recovery of Rs.1,33,137/- and Rs.76,178/- has been recovered illegally from the terminal benefits/salary of the applicant and should be refunded to him immediately and in any case not later than three months from the date of receipt of a certified copy of this order.
5.4 The respondents have produced Annexure R-3, which shows that the pay of the applicant on 01.07.2016 was Rs.14,410/-. However, as per (Annexure A-9) the document produced by the applicant in O.A., his pay as on 01.07.2016 has been reflected as Rs.14,870/-, based on which his pension has been fixed at Rs.14,710/-. In view of the two different entries in the records of the official records, for the same date of 01.07.2016, the respondents are directed to revisit the case of the applicant by getting the matter re-examined regarding the exact last basic pay drawn by the applicant on the relevant dote, and get his pension fixed correctly. This exercise must be completed within 03 months from the date of receipt of a certified copy of this order."
2. The case of the respondent before the Tribunal was primarily against the recovery that was made from the salary between the period September, 2014 till September, 2015 and also from the Gratuity paid to the respondent at the time of his retirement on 31.10.2016. The amounts recovered from salary and Gratuity were Rs.76,178/- and Rs.1,33,137/- respectively.
3. The case of the respondent was that the same could not be effected in view of the judgment of the Hon'ble Supreme Court in State of Punjab & Ors. vs. Rafiq Masih & Ors., reported as 2014(8) SCALE 613.
4. The case of the petitioner before the Tribunal was that the recovery of Rs.76,178/- was effected because o
Recovery of excess payments made to employees is impermissible where no fault exists on the employee's part and payments have spanned over five years, protecting livelihood rights.
Recovery of excess salary is iniquitous if made after five years, violating constitutional principles.
Recovery of excess salary is impermissible when employees are not at fault, emphasizing equitable relief to prevent undue hardship.
Recoveries from retired employees based on erroneous salary payments are impermissible, emphasizing equitable treatment and judicial discretion in enforcing employee rights.
Recovery of excess payments from employees without their fault violates principles of equity and fairness, especially when recovery occurs post-retirement and after a significant period.
Recovery of excess pay from Group C employees impermissible if due to employer's error without employee's fault, per Rafiq Masih.
Recovery of excess pay permissible only for amounts paid within 5 years before recovery order, even for serving Group A employees without fault, per Rafiq Masih to prevent undue hardship (28 words).
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