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Tuesday, August 2, 2016

Service Matter ;- 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. For these reasons, the judgment of the High Court which set aside 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.

                                                                  REPORTABLE

        IN THE SUPREME COURT OF INDIA
                         CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL No. 3500 OF 2006


HIGH COURT OF PUNJAB & HARYANA          .....APPELLANTS
& ORS


                                   Versus



JAGDEV SINGH         .....RESPONDENT







                               J U D G M E N T



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 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  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 [1]admitted.  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  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  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  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.


.......................................CJI
                                            [T S  THAKUR]



..............................................J
                                           [Dr D Y  CHANDRACHUD]


New Delhi
JULY 29, 2016.
-----------------------
[1]   [2] (2015) 4 SCC 334


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