Full Judgment Text
1
REPORTABLE
2025 INSC 449
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO(s). __________ OF 2025
(Arising out of SLP(C) No(s). 5918/2024)
JOGESWAR SAHOO & ORS. ... APPELLANTS
VERSUS
THE DISTRICT JUDGE,
CUTTACK & ORS. …RESPONDENTS
J U D G M E N T
PRASHANT KUMAR MISHRA, J.
Leave granted.
2. This appeal is directed against the final judgment and
order dated 09.11.2023 passed by the High Court of Orissa at
Cuttack in WP (C) No. 33482 of 2023 whereunder the High
Cout dismissed the appellants’ writ petition in which a
challenge was made to the orders dated 12.09.2023 and
08.09.2023 passed by the Special Judge, Special Court,
Signature Not Verified
Digitally signed by
SAPNA BISHT
Date: 2025.04.04
16:58:44 IST
Reason:
Cuttack and Registrar, Civil Courts, Cuttack, as the case may
2
be, directing recovery of Rs 26,034/-, Rs.40713/-, Rs. 26539/-,
Rs. 24683/- and Rs. 21,485/-.
3. At the relevant time, the appellants were working as
Stenographer Grade-I and Personal Assistant in the
establishment of District Judiciary, Cuttack, Orissa. They were
granted financial benefit for a sum of Rs 26,034/-, Rs.40713/-,
Rs. 26539/-, Rs. 24683/- and Rs. 21,485/- by way of credit to
their account vide Office Order No. 63 dated 10.05.2017
passed by the District Judge, Cuttack granting
promotion/appointment retrospectively w.e.f 01.04.2003
consequent upon upgradation of the Stenographers in three
grades such as Stenographer Grade-I, Stenographer Grade-II
and Stenographer Grade-III by relying upon the
recommendations of the respondent no. 1 in compliance
towards the implementation of the report of the Shetty
Commission.
4. After grant of such financial benefit, in the year 2017, the
appellants have superannuated from their respective posts
sometimes in the year 2020. After three years of their
retirement and six years of granting the financial benefit,
3
respondent no. 1 ordered for recovery of the said amount on
the ground that extension of benefit of Shetty Commission’s
recommendations to the appellants were on an erroneous
interpretation of such recommendations, therefore, the
financial benefit granted to them is liable to be recovered and
under orders dated 12.09.2023 and 08.09.2023, the appellants
were directed to deposit the excess drawn arrears. Since the
orders were passed without affording any opportunity of
hearing to the appellants, they preferred a writ petition before
the High Court which came to be dismissed under the
impugned judgment and order.
5 . Learned counsel appearing for the appellants argued that
the appellants were granted financial benefit without there
being any fraud or misrepresentation by them, therefore,
recovery of the amount after three years of their retirement is
illegal and arbitrary. It is argued that the High Court has failed
to consider the settled legal position in catena of decisions of
this Court wherein such recovery from a low paid employee
after retirement have been held bad in law.
4
6 . Per contra, learned counsel appearing for the respondents
would support the impugned judgment on submission that the
appellants were not entitled to the financial benefit extended to
them and the order passed by the District Judge, Cuttack was
affirmed by the High Court of Orissa in exercise of an
administrative power, therefore, the recovery is justified. It is
also argued that such financial benefit upon retrospective
promotion was granted with the condition that excess amount,
if any, paid shall be refunded by the appellants and the
appellants have furnished their respective undertakings to the
said effect, therefore, they are estopped from challenging the
recovery.
7 . The issue falling for our consideration is not about the
legality of the retrospective promotion and the financial benefit
granted to the appellants on 10.05.2017. The issue for
consideration is whether recovery of the amount extended to
the appellants while they were in service is justified after their
retirement and that too without affording any opportunity of
hearing.
5
8 . The law in this regard has been settled by this Court in
catena of judgments rendered time and again; Sahib Ram vs.
1
State of Haryana , Shyam Babu Verma vs. Union of
2 3
India , Union of India vs. M. Bhaskar and V. Gangaram
4
vs. Regional Jt. Director and in a recent decision in the
5
matter of Thomas Daniel vs. State of Kerala & Ors. .
9. This Court has consistently taken the view that if the
excess amount was not paid on account of any
misrepresentation or fraud on the part of the employee or if
such excess payment was made by the employer by applying a
wrong principle for calculating the pay/allowance or on the
basis of a particular interpretation of rule/order, which is
subsequently found to be erroneous, such excess payments of
emoluments or allowances are not recoverable. It is held that
such relief against the recovery is not because of any right of
the employee but in equity, exercising judicial discretion to
provide relief to the employee from the hardship that will be
caused if the recovery is ordered.
1
(1995) Supp (1) SCC 18
2
(1994) 2 SCC 521
3
(1996) 4 SCC 416
4
(1997) 6 SCC 139
5
(2022) SCC online SC 536
6
10. In Thomas Daniel (supra), this Court has held thus in
paras 10, 11, 12 and 13:
“ 10 . In Sahib Ram v. State of Haryana1 this Court
restrained recovery of payment which was given
under the upgraded pay scale on account of wrong
construction of relevant order by the authority
concerned, without any misrepresentation on part
of the employees. It was held thus:
“5. Admittedly the appellant does not
possess the required educational
qualifications. Under the circumstances the
appellant would not be entitled to the
relaxation. The Principal erred in granting
him the relaxation. Since the date of
relaxation, the appellant had been paid his
salary on the revised scale. However, it is
not on account of any misrepresentation
made by the appellant that the benefit of
the higher pay scale was given to him but
by wrong construction made by the
Principal for which the appellant cannot be
held to be at fault. Under the
circumstances the amount paid till date
may not be recovered from the appellant.
The principle of equal pay for equal work
would not apply to the scales prescribed
by the University Grants Commission. The
appeal is allowed partly without any order
as to costs.”
11. In Col. B.J. Akkara (Retd.) v. Government of
India2 this Court considered an identical question
as under:
“27. The last question to be considered is
whether relief should be granted against
7
the recovery of the excess payments made
on account of the wrong
interpretation/understanding of the circular
dated 7-6-1999. This Court has consistently
granted relief against recovery of excess
wrong payment of emoluments/allowances
from an employee, if the following
conditions are fulfilled (vide Sahib
Ram v. State of Haryana [1995 Supp (1)
SCC 18 : 1995 SCC (L&S) 248], Shyam
Babu Verma v. Union of India [(1994) 2
SCC 521 : 1994 SCC (L&S) 683 : (1994) 27
ATC 121], Union of India v. M.
Bhaskar [(1996) 4 SCC 416 : 1996 SCC
(L&S) 967] and V. Gangaram v. Regional Jt.
Director [(1997) 6 SCC 139 : 1997 SCC
(L&S) 1652]):
(a) The excess payment was not made on
account of any misrepresentation or fraud
on the part of the employee.
(b) Such excess payment was made by the
employer by applying a wrong principle for
calculating the pay/allowance or on the
basis of a particular interpretation of
rule/order, which is subsequently found to
be erroneous.
28. Such relief, restraining back recovery of
excess payment, is granted by courts not
because of any right in the employees, but
in equity, in exercise of judicial discretion to
relieve the employees from the hardship
that will be caused if recovery is
implemented. A government servant,
particularly one in the lower rungs of
service would spend whatever emoluments
he receives for the upkeep of his family. If
8
he receives an excess payment for a long
period, he would spend it, genuinely
believing that he is entitled to it. As any
subsequent action to recover the excess
payment will cause undue hardship to him,
relief is granted in that behalf. But where
the employee had knowledge that the
payment received was in excess of what
was due or wrongly paid, or where the
error is detected or corrected within a short
time of wrong payment, courts will not
grant relief against recovery. The matter
being in the realm of judicial discretion,
courts may on the facts and circumstances
of any particular case refuse to grant such
relief against recovery.
29. On the same principle, pensioners can
also seek a direction that wrong payments
should not be recovered, as pensioners are
in a more disadvantageous position when
compared to in-service employees. Any
attempt to recover excess wrong payment
would cause undue hardship to them. The
petitioners are not guilty of any
misrepresentation or fraud in regard to the
excess payment. NPA was added to
minimum pay, for purposes of stepping up,
due to a wrong understanding by the
implementing departments. We are
therefore of the view that the respondents
shall not recover any excess payments
made towards pension in pursuance of the
circular dated 7-6-1999 till the issue of the
clarificatory circular dated 11-9-2001.
Insofar as any excess payment made after
the circular dated 11-9-2001, obviously the
Union of India will be entitled to recover the
9
excess as the validity of the said circular
has been upheld and as pensioners have
been put on notice in regard to the wrong
calculations earlier made.”
12. In Syed Abdul Qadir v. State of Bihar3 excess
payment was sought to be recovered which was
made to the appellants-teachers on account of
mistake and wrong interpretation of prevailing
Bihar Nationalised Secondary School (Service
Conditions) Rules, 1983. The appellants therein
contended that even if it were to be held that
the appellants were not entitled to the benefit
of additional increment on promotion, the
excess amount should not be recovered from
them, it having been paid without any
misrepresentation or fraud on their part. The
Court held that the appellants cannot be held
responsible in such a situation and recovery of
the excess payment should not be ordered,
especially when the employee has subsequently
retired. The court observed that in general
parlance, recovery is prohibited by courts
where there exists no misrepresentation or
fraud on the part of the employee and when the
excess payment has been made by applying a
wrong interpretation/understanding of a Rule or
Order. It was held thus:
“59. Undoubtedly, the excess amount that
has been paid to the appellant teachers was
not because of any misrepresentation or
fraud on their part and the appellants also
had no knowledge that the amount that
was being paid to them was more than
what they were entitled to. It would not be
out of place to mention here that the
Finance Department had, in its counter-
affidavit, admitted that it was a bona fide
10
mistake on their part. The excess payment
made was the result of wrong interpretation
of the Rule that was applicable to them, for
which the appellants cannot be held
responsible. Rather, the whole confusion
was because of inaction, negligence and
carelessness of the officials concerned of
the Government of Bihar. Learned counsel
appearing on behalf of the appellant
teachers submitted that majority of the
beneficiaries have either retired or are on
the verge of it. Keeping in view the peculiar
facts and circumstances of the case at hand
and to avoid any hardship to the appellant
teachers, we are of the view that no
recovery of the amount that has been paid
in excess to the appellant teachers should
be made.”
13. In State of Punjab v. Rafiq Masih (White
Washer)4 wherein this court examined the validity
of an order passed by the State to recover the
monetary gains wrongly extended to the beneficiary
employees in excess of their entitlements without
any fault or misrepresentation at the behest of the
recipient. This Court considered situations of
hardship caused to an employee, if recovery is
directed to reimburse the employer and disallowed
the same, exempting the beneficiary employees
from such recovery. It was held thus:
“8. As between two parties, if a determination is
rendered in favour of the party, which is the weaker
of the two, without any serious detriment to the
other (which is truly a welfare State), the issue
resolved would be in consonance with the concept
of justice, which is assured to the citizens of India,
even in the Preamble of the Constitution of India.
The right to recover being pursued by the employer,
11
will have to be compared, with the effect of the
recovery on the employee concerned. If the effect
of the recovery from the employee concerned would
be, more unfair, more wrongful, more improper,
and more unwarranted, than the corresponding
right of the employer to recover the amount, then it
would be iniquitous and arbitrary, to effect the
recovery. In such a situation, the employee's right
would outbalance, and therefore eclipse, the right
of the employer to recover.
xxxxxxxxx
18. 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 hereinabove, we may, as a
ready reference, summarise the following few
situations, wherein recoveries by the employers,
would be impermissible in law:
(i) Recovery from the employees belonging to Class
III and Class IV service (or Group C and Group D
service).
(ii) Recovery from the retired employees, or the
employees who are due to retire within one year, of
the order of recovery.
(iii) Recovery from the 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.
12
(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.”
11. In the case at hand, the appellants were working on
the post of Stenographers when the subject illegal payment
was made to them. It is not reflected in the record that such
payment was made to the appellants on account of any fraud
or misrepresentation by them. It seems, when the financial
benefit was extended to the appellants by the District Judge,
Cuttack, the same was subsequently not approved by the High
Court which resulted in the subsequent order of recovery. It is
also not in dispute that the payment was made in the year
2017 whereas the recovery was directed in the year 2023.
However, in the meanwhile, the appellants have retired in the
year 2020. It is also an admitted position that the appellants
were not afforded any opportunity of hearing before issuing the
order of recovery. The appellants having superannuated on a
ministerial post of Stenographer were admittedly not holding
any gazetted post as such applying the principle enunciated by
13
this Court in the above quoted judgment, the recovery is found
unsustainable.
12. For the aforestated, we are of the considered view
that the appeal deserves to be allowed. Accordingly, we allow
the appeal and set aside the order of the High Court and in
consequence the orders dated 12.09.2023 and 08.09.2023 by
which the appellants were directed to deposit the excess drawn
arrears are set aside.
…………………………………………………J.
(PAMIDIGHANTAM SRI NARASIMHA)
.........……………………………….J.
(PRASHANT KUMAR MISHRA)
NEW DELHI;
APRIL 04, 2025.
REPORTABLE
2025 INSC 449
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO(s). __________ OF 2025
(Arising out of SLP(C) No(s). 5918/2024)
JOGESWAR SAHOO & ORS. ... APPELLANTS
VERSUS
THE DISTRICT JUDGE,
CUTTACK & ORS. …RESPONDENTS
J U D G M E N T
PRASHANT KUMAR MISHRA, J.
Leave granted.
2. This appeal is directed against the final judgment and
order dated 09.11.2023 passed by the High Court of Orissa at
Cuttack in WP (C) No. 33482 of 2023 whereunder the High
Cout dismissed the appellants’ writ petition in which a
challenge was made to the orders dated 12.09.2023 and
08.09.2023 passed by the Special Judge, Special Court,
Signature Not Verified
Digitally signed by
SAPNA BISHT
Date: 2025.04.04
16:58:44 IST
Reason:
Cuttack and Registrar, Civil Courts, Cuttack, as the case may
2
be, directing recovery of Rs 26,034/-, Rs.40713/-, Rs. 26539/-,
Rs. 24683/- and Rs. 21,485/-.
3. At the relevant time, the appellants were working as
Stenographer Grade-I and Personal Assistant in the
establishment of District Judiciary, Cuttack, Orissa. They were
granted financial benefit for a sum of Rs 26,034/-, Rs.40713/-,
Rs. 26539/-, Rs. 24683/- and Rs. 21,485/- by way of credit to
their account vide Office Order No. 63 dated 10.05.2017
passed by the District Judge, Cuttack granting
promotion/appointment retrospectively w.e.f 01.04.2003
consequent upon upgradation of the Stenographers in three
grades such as Stenographer Grade-I, Stenographer Grade-II
and Stenographer Grade-III by relying upon the
recommendations of the respondent no. 1 in compliance
towards the implementation of the report of the Shetty
Commission.
4. After grant of such financial benefit, in the year 2017, the
appellants have superannuated from their respective posts
sometimes in the year 2020. After three years of their
retirement and six years of granting the financial benefit,
3
respondent no. 1 ordered for recovery of the said amount on
the ground that extension of benefit of Shetty Commission’s
recommendations to the appellants were on an erroneous
interpretation of such recommendations, therefore, the
financial benefit granted to them is liable to be recovered and
under orders dated 12.09.2023 and 08.09.2023, the appellants
were directed to deposit the excess drawn arrears. Since the
orders were passed without affording any opportunity of
hearing to the appellants, they preferred a writ petition before
the High Court which came to be dismissed under the
impugned judgment and order.
5 . Learned counsel appearing for the appellants argued that
the appellants were granted financial benefit without there
being any fraud or misrepresentation by them, therefore,
recovery of the amount after three years of their retirement is
illegal and arbitrary. It is argued that the High Court has failed
to consider the settled legal position in catena of decisions of
this Court wherein such recovery from a low paid employee
after retirement have been held bad in law.
4
6 . Per contra, learned counsel appearing for the respondents
would support the impugned judgment on submission that the
appellants were not entitled to the financial benefit extended to
them and the order passed by the District Judge, Cuttack was
affirmed by the High Court of Orissa in exercise of an
administrative power, therefore, the recovery is justified. It is
also argued that such financial benefit upon retrospective
promotion was granted with the condition that excess amount,
if any, paid shall be refunded by the appellants and the
appellants have furnished their respective undertakings to the
said effect, therefore, they are estopped from challenging the
recovery.
7 . The issue falling for our consideration is not about the
legality of the retrospective promotion and the financial benefit
granted to the appellants on 10.05.2017. The issue for
consideration is whether recovery of the amount extended to
the appellants while they were in service is justified after their
retirement and that too without affording any opportunity of
hearing.
5
8 . The law in this regard has been settled by this Court in
catena of judgments rendered time and again; Sahib Ram vs.
1
State of Haryana , Shyam Babu Verma vs. Union of
2 3
India , Union of India vs. M. Bhaskar and V. Gangaram
4
vs. Regional Jt. Director and in a recent decision in the
5
matter of Thomas Daniel vs. State of Kerala & Ors. .
9. This Court has consistently taken the view that if the
excess amount was not paid on account of any
misrepresentation or fraud on the part of the employee or if
such excess payment was made by the employer by applying a
wrong principle for calculating the pay/allowance or on the
basis of a particular interpretation of rule/order, which is
subsequently found to be erroneous, such excess payments of
emoluments or allowances are not recoverable. It is held that
such relief against the recovery is not because of any right of
the employee but in equity, exercising judicial discretion to
provide relief to the employee from the hardship that will be
caused if the recovery is ordered.
1
(1995) Supp (1) SCC 18
2
(1994) 2 SCC 521
3
(1996) 4 SCC 416
4
(1997) 6 SCC 139
5
(2022) SCC online SC 536
6
10. In Thomas Daniel (supra), this Court has held thus in
paras 10, 11, 12 and 13:
“ 10 . In Sahib Ram v. State of Haryana1 this Court
restrained recovery of payment which was given
under the upgraded pay scale on account of wrong
construction of relevant order by the authority
concerned, without any misrepresentation on part
of the employees. It was held thus:
“5. Admittedly the appellant does not
possess the required educational
qualifications. Under the circumstances the
appellant would not be entitled to the
relaxation. The Principal erred in granting
him the relaxation. Since the date of
relaxation, the appellant had been paid his
salary on the revised scale. However, it is
not on account of any misrepresentation
made by the appellant that the benefit of
the higher pay scale was given to him but
by wrong construction made by the
Principal for which the appellant cannot be
held to be at fault. Under the
circumstances the amount paid till date
may not be recovered from the appellant.
The principle of equal pay for equal work
would not apply to the scales prescribed
by the University Grants Commission. The
appeal is allowed partly without any order
as to costs.”
11. In Col. B.J. Akkara (Retd.) v. Government of
India2 this Court considered an identical question
as under:
“27. The last question to be considered is
whether relief should be granted against
7
the recovery of the excess payments made
on account of the wrong
interpretation/understanding of the circular
dated 7-6-1999. This Court has consistently
granted relief against recovery of excess
wrong payment of emoluments/allowances
from an employee, if the following
conditions are fulfilled (vide Sahib
Ram v. State of Haryana [1995 Supp (1)
SCC 18 : 1995 SCC (L&S) 248], Shyam
Babu Verma v. Union of India [(1994) 2
SCC 521 : 1994 SCC (L&S) 683 : (1994) 27
ATC 121], Union of India v. M.
Bhaskar [(1996) 4 SCC 416 : 1996 SCC
(L&S) 967] and V. Gangaram v. Regional Jt.
Director [(1997) 6 SCC 139 : 1997 SCC
(L&S) 1652]):
(a) The excess payment was not made on
account of any misrepresentation or fraud
on the part of the employee.
(b) Such excess payment was made by the
employer by applying a wrong principle for
calculating the pay/allowance or on the
basis of a particular interpretation of
rule/order, which is subsequently found to
be erroneous.
28. Such relief, restraining back recovery of
excess payment, is granted by courts not
because of any right in the employees, but
in equity, in exercise of judicial discretion to
relieve the employees from the hardship
that will be caused if recovery is
implemented. A government servant,
particularly one in the lower rungs of
service would spend whatever emoluments
he receives for the upkeep of his family. If
8
he receives an excess payment for a long
period, he would spend it, genuinely
believing that he is entitled to it. As any
subsequent action to recover the excess
payment will cause undue hardship to him,
relief is granted in that behalf. But where
the employee had knowledge that the
payment received was in excess of what
was due or wrongly paid, or where the
error is detected or corrected within a short
time of wrong payment, courts will not
grant relief against recovery. The matter
being in the realm of judicial discretion,
courts may on the facts and circumstances
of any particular case refuse to grant such
relief against recovery.
29. On the same principle, pensioners can
also seek a direction that wrong payments
should not be recovered, as pensioners are
in a more disadvantageous position when
compared to in-service employees. Any
attempt to recover excess wrong payment
would cause undue hardship to them. The
petitioners are not guilty of any
misrepresentation or fraud in regard to the
excess payment. NPA was added to
minimum pay, for purposes of stepping up,
due to a wrong understanding by the
implementing departments. We are
therefore of the view that the respondents
shall not recover any excess payments
made towards pension in pursuance of the
circular dated 7-6-1999 till the issue of the
clarificatory circular dated 11-9-2001.
Insofar as any excess payment made after
the circular dated 11-9-2001, obviously the
Union of India will be entitled to recover the
9
excess as the validity of the said circular
has been upheld and as pensioners have
been put on notice in regard to the wrong
calculations earlier made.”
12. In Syed Abdul Qadir v. State of Bihar3 excess
payment was sought to be recovered which was
made to the appellants-teachers on account of
mistake and wrong interpretation of prevailing
Bihar Nationalised Secondary School (Service
Conditions) Rules, 1983. The appellants therein
contended that even if it were to be held that
the appellants were not entitled to the benefit
of additional increment on promotion, the
excess amount should not be recovered from
them, it having been paid without any
misrepresentation or fraud on their part. The
Court held that the appellants cannot be held
responsible in such a situation and recovery of
the excess payment should not be ordered,
especially when the employee has subsequently
retired. The court observed that in general
parlance, recovery is prohibited by courts
where there exists no misrepresentation or
fraud on the part of the employee and when the
excess payment has been made by applying a
wrong interpretation/understanding of a Rule or
Order. It was held thus:
“59. Undoubtedly, the excess amount that
has been paid to the appellant teachers was
not because of any misrepresentation or
fraud on their part and the appellants also
had no knowledge that the amount that
was being paid to them was more than
what they were entitled to. It would not be
out of place to mention here that the
Finance Department had, in its counter-
affidavit, admitted that it was a bona fide
10
mistake on their part. The excess payment
made was the result of wrong interpretation
of the Rule that was applicable to them, for
which the appellants cannot be held
responsible. Rather, the whole confusion
was because of inaction, negligence and
carelessness of the officials concerned of
the Government of Bihar. Learned counsel
appearing on behalf of the appellant
teachers submitted that majority of the
beneficiaries have either retired or are on
the verge of it. Keeping in view the peculiar
facts and circumstances of the case at hand
and to avoid any hardship to the appellant
teachers, we are of the view that no
recovery of the amount that has been paid
in excess to the appellant teachers should
be made.”
13. In State of Punjab v. Rafiq Masih (White
Washer)4 wherein this court examined the validity
of an order passed by the State to recover the
monetary gains wrongly extended to the beneficiary
employees in excess of their entitlements without
any fault or misrepresentation at the behest of the
recipient. This Court considered situations of
hardship caused to an employee, if recovery is
directed to reimburse the employer and disallowed
the same, exempting the beneficiary employees
from such recovery. It was held thus:
“8. As between two parties, if a determination is
rendered in favour of the party, which is the weaker
of the two, without any serious detriment to the
other (which is truly a welfare State), the issue
resolved would be in consonance with the concept
of justice, which is assured to the citizens of India,
even in the Preamble of the Constitution of India.
The right to recover being pursued by the employer,
11
will have to be compared, with the effect of the
recovery on the employee concerned. If the effect
of the recovery from the employee concerned would
be, more unfair, more wrongful, more improper,
and more unwarranted, than the corresponding
right of the employer to recover the amount, then it
would be iniquitous and arbitrary, to effect the
recovery. In such a situation, the employee's right
would outbalance, and therefore eclipse, the right
of the employer to recover.
xxxxxxxxx
18. 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 hereinabove, we may, as a
ready reference, summarise the following few
situations, wherein recoveries by the employers,
would be impermissible in law:
(i) Recovery from the employees belonging to Class
III and Class IV service (or Group C and Group D
service).
(ii) Recovery from the retired employees, or the
employees who are due to retire within one year, of
the order of recovery.
(iii) Recovery from the 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.
12
(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.”
11. In the case at hand, the appellants were working on
the post of Stenographers when the subject illegal payment
was made to them. It is not reflected in the record that such
payment was made to the appellants on account of any fraud
or misrepresentation by them. It seems, when the financial
benefit was extended to the appellants by the District Judge,
Cuttack, the same was subsequently not approved by the High
Court which resulted in the subsequent order of recovery. It is
also not in dispute that the payment was made in the year
2017 whereas the recovery was directed in the year 2023.
However, in the meanwhile, the appellants have retired in the
year 2020. It is also an admitted position that the appellants
were not afforded any opportunity of hearing before issuing the
order of recovery. The appellants having superannuated on a
ministerial post of Stenographer were admittedly not holding
any gazetted post as such applying the principle enunciated by
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this Court in the above quoted judgment, the recovery is found
unsustainable.
12. For the aforestated, we are of the considered view
that the appeal deserves to be allowed. Accordingly, we allow
the appeal and set aside the order of the High Court and in
consequence the orders dated 12.09.2023 and 08.09.2023 by
which the appellants were directed to deposit the excess drawn
arrears are set aside.
…………………………………………………J.
(PAMIDIGHANTAM SRI NARASIMHA)
.........……………………………….J.
(PRASHANT KUMAR MISHRA)
NEW DELHI;
APRIL 04, 2025.