2011 Supreme(Raj) 2293
RAJASTHAN HIGH COURT
Alok Sharma, J.
Madan Gopal Joshi - Appellant
Versus
State of Rajasthan and Ors. - Respondent
S.B. Civil Writ Petition No. 11100 of 2010.
Decided On : 28-07-2011
Advocates:
For the Petitioner:Pramendra Bohra, Advocate.
For the Respondents:Dr. Gopal Raj Kalla, Advocate.
Recovery of overpaid amounts from employees should not be made if the employees were not guilty of misrepresentation or fraud, as established in State of Bihar & Others v. Pandey Jagdishwar Prasad.
Headnote:
Recovery of Excess Pay - Pension Department - State of Bihar & Others v. Pandey Jagdishwar Prasad (2009) 3 SCC 117
Fact of the Case:
The petitioner, a Junior Accountant, had his pay step up in 1980 and continued in service until retirement. The Pension Department later sought recovery of the excess pay, reducing the petitioner's last pay and recovering the differential amount from his gratuity.
Finding of the Court:
The court found that the petitioner innocently received the overpayment and was not guilty of misrepresentation or fraud. The recovery of the excess amount from the gratuity without just cause was deemed arbitrary.
Issues: The main issue was the recovery of the excess pay from the petitioner's gratuity without affording him an opportunity to be heard.
Ratio Decidendi: The court relied on the principle established in State of Bihar & Others v. Pandey Jagdishwar Prasad, where it was held that when higher pay is given to an employee without misrepresentation or fraud, no recovery from the retirement dues of the employee should be made.
Final Decision: The court allowed the petition and directed the respondents to refund the arbitrarily deducted amount from the petitioner's gratuity within eight weeks, with the petitioner entitled to interest at the rate of 12% per annum if the amount is not refunded within the specified period. The revision of the petitioner's pension following the corrections made in the salary was not affected by the order.
JUDGMENT
1. - In this case, the petitioner was appointed as Junior Accountant on 05.02.1970. While he was working as a Junior Accountant in the IGNP on or about 27.09.1980, he was given benefit of step up of his pay with reference to the pay of one Ratan Lal Modi, who was also working as a Junior Accountant.
2. According to the learned counsel for the petitioner thereupon based on his pay fixed in pursuance to the order dated 27.09.1980, he continued in service with the benefit thereof and retired on 31.07.2009 from the post of Junior Accountant itself.
3. Learned counsel for the petitioner submits that at the time of retirement, certain objections were pointed out by the Pension Department vide letter dated 29.06.2009, wherein, it was stated that the recovery has been made from Ratan Lal Modi due to wrong pay step up made in his favour and as the petitioner was given the benefit of pay step up with reference to Ratan Lal Modi, the order dated 27.09.1980 be cancelled and the resultant difference in the amount be accordingly recovered from the petitioner. The letter dated 29.06.2009 at the instance of the Pension Department has been annexed to the writ petition as Annexure/2.
4. The petitioner's case is that without affording any opportunity of hearing to him, the Director, Secondary Education, Govt. of Rajasthan, Bikaner complied with the directions of the Pension Department and amended the pay scales of the petitioner right from the year 1983. Consequently, the last pay of Rs. 23910/- drawn by the petitioner at the time of his retirement stood reduced to Rs. 23510/-. As a result of reducing of the pay as above, the differential amount of Rs. 71692/- was shown as paid excess to the petitioner and recovered from his gratuity amount payable to the petitioner.
5. Learned counsel for the petitioner in the course of arguments submits that he does not challenge and seek adjudication of the re-fixation of salary and pension of the petitioner. Learned counsel however submits that he is aggrieved of the recovery of Rs. 71692/- from his gratuity amount.
6. Learned counsel for the petitioner submits that in the aforesaid circumstances of recovery of Rs. 71692/- without as much issuing notice to him and overlooking the time elapsed in the meantime on 25.01.2010, he sent a legal notice to the respondents and ventilated his grievance before them but to no avail. The Joint Director, Pension and Pensioner's Welfare Department, Bikaner vide letter dated 19.02.2010 in a mechanical manner replied to the petitioner's notice stating that the recovery of Rs. 71692/- has been done on the basis of recalibration of the petitioner's pay following discovery of the wrong step up of his pay in 1980.
7. The respondents have filed reply. Learned counsel for the respondents has reiterated the case that a wrong step up of pay having been given to the petitioner, the Department was entitled to recover the excess amount of pay made over to the petitioner for the last about 26 years.
8. I have heard learned counsel for the parties and perused the paper-book of this petition.
9. The fact of the matter is that the higher pay given to the petitioner as a reason of the step up of his pay in 1983 was not a consequence of any mis-representation or fraud at the instance of the petitioner. The step up of pay was consequent to step up to one Ratan Lal Modi to whom the petitioner was admittedly senior. For about 26 years, no rectification was sought to be made by the respondents.
10. It has been the consistent practice of the courts and there are legions of judgments where under, the amount over paid to the employees where the employees were not guilty of any misrepresentation or fraud has been consistently protected by the courts and the courts have directed that the money innocently over paid to the employees is not to be recovered. In the case of State of Bihar & Others v. Pandey Jagdishwar Prasad, reported in (2009) 3 SCC 117 , the Hon'ble Supreme Court has held that when hig
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