Dr. D Y CHANDRACHUD, J 1 The High Court of Punjab and Haryana allowed, by its judgment
dated 1 August 2005, a petition filed by the Respondent under Article 226
of the Constitution to challenge a direction issued by the State to the
Accountant General for the recovery of an excess payment towards salary.
2 The facts lie in a narrow compass. The Respondent was appointed
as a Civil Judge (Junior Division) on 16 July 1987 and was promoted as
Additional Civil Judge on 28 August 1997 in the judicial service of the
State. By a notification dated 28 September 2001, a pay scale of
Rs. 10000-325-15200 (senior scale) was allowed under the Haryana Civil
Service (Judicial Branch) and Haryana Superior Judicial Service Revised
Pay Rules 2001. Under the rules, each officer was required to submit an
undertaking that any excess which may be found to have been paid will be
refunded to the Government either by adjustment against future payments
due or otherwise.
3 The Respondent furnished an undertaking and was granted the
revised pay scale and selection grade of Rs. 14300-400-18000-300. While
opting for the revised pay scale, the Respondent undertook to refund any
excess payment if it was so detected and demanded subsequently. The
revised pay scale in the selection grade was allowed to the Respondent on
7 January 2002.
4 The Respondent was placed under suspension on 19 August 2002
and eventually, was compulsorily retired from service on 12 February JUDGMENT
2003.
5 In the meantime, this Court in Civil Writ (C) 1022 of 1989 accepted
the recommendations of the First National Judicial Pay Commission
(Shetty Commission). Thereupon, the Haryana Civil Services (Judicial
Branch) and Haryana Superior Judicial Service Revised Pay Rules 2003
were notified on 7 May 2003.
6 In view thereof the pay scales of judicial officers in Haryana were
once again revised with effect from 1 January 1996. An exercise was
undertaken for adjustment of excess payments made to judicial officers,
following the notification of the revised pay rules. On 18 February 2004,
a letter for the recovery of an amount of Rs. 1,22,003/- was served upon
the Respondent pursuant to the direction of the Registrar of the High
Court.
7 The Respondent challenged the action for recovery in writ
proceedings under Article 226. The petition was allowed by the impugned
judgment of the High Court. The High Court found substance in the
grievance of the Respondent that the excess payment made to him towards
salary and allowance prior to his retirement could not be recovered at that
stage, there being no fraud or misrepresentation on his part.
8 The order of the High Court has been challenged in these
proceedings. From the record of the proceedings, it is evident that when JUDGMENT
the Respondent opted for the revised pay scale, he furnished an
undertaking to the effect that he would be liable to refund any excess
payment made to him. In the counter affidavit which has been filed by the
Respondent in these proceedings, this position has been specifically
1admitted. Subsequently, when the rules were revised and notified on
7 May 2003 it was found that a payment in excess had been made to the
1 (2015) 4 SCC 334
Respondent. On 18 February 2004, the excess payment was sought to be
recovered in terms of the undertaking.
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 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.
10 In State of Punjab & Ors etc. vs. Rafiq Masih (White Washer) etc1. this
Court held that while it is not possible to postulate all situations of
hardship where payments have mistakenly been made by an employer, in JUDGMENT
the following situations, a recovery by the employer would be
impermissible in law:
“(i) Recovery from employees belonging to
Class-III 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 have 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.” (emphasis supplied).
11 The principle enunciated in proposition (ii) above 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.
12 For these reasons, the judgment of the High Court which set aside JUDGMENT the action for recovery is unsustainable. However, we are of the view that
the recovery should be made in reasonable instalments. We direct that the
recovery be made in equated monthly instalments spread over a period of
two years.
13 The judgment of the High Court is accordingly set aside. The Civil
Appeal shall stand allowed in the above terms. There shall be no order as
to costs.
New Delhi JULY 29, 2016.