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
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
