Full Judgment Text
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Reserved on: 06.11.2023
Date of Decision: 23.11.2023
+ W.P.(C) 12483/2023 & CM APPL. 49256/2023
UNION OF INDIA ..... Appellant
Through: Mr. Nitinjaya Chaudhary, Sr. Panel
Counsel with Mr. Gokul Sharma, G.P.
and Mr. Rahul Maurya, Advocate.
versus
DR SUCHITA NINAWE ..... Respondent
Through: Mr. Ankit Jain, Advocate
CORAM:
HON'BLE MR. JUSTICE V. KAMESWAR RAO
HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA
J U D G M E N T
MANMEET PRITAM SINGH ARORA, J:
CAV 492/2023
Since, the Respondent through her counsel has entered appearance,
the caveat stands discharged.
CM APPL. 49257/2023 (for exemption)
Allowed, subject to all just exceptions.
Accordingly, this application stands disposed of.
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Digitally Signed
By:RASHMI DABAS
Signing Date:24.11.2023
16:57:32
W.P.(C) 12483/2023
1. This writ petition has been filed by the Union of India through
Department of Biotechnology, impugning the order dated 10.05.2023 passed
by the Principal Bench of Central Administrative Tribunal, New Delhi (‘the
Tribunal’) in Original Application bearing O.A. No. 2944/2022 (‘the O.A.’),
titled as “ Dr. Suchita Ninawe v. Union of India ”, whereby the Tribunal
allowed the O.A. filed by the Respondent herein challenging the Office
Memorandum (‘O.M.’) dated 31.12.2021, to the limited extent of recovery
of excess amount of Transport Allowance (‘TA’) from the Respondent.
1.1. The Tribunal vide impugned order set aside the said O.M. dated
31.12.2021 and directed the Petitioner herein to not recover any amount
towards TA provided to the Respondent for the period from July, 2013 to
August, 2017 and also, to refund the amount already recovered from her,
within a period of three (3) months from the date of receipt of impugned
order.
2. The Petitioner is the Department of Biotechnology under the Ministry
of Science and Technology.
3. The Respondent herein is currently employed with the Petitioner
department at the position of Scientist ‘G’.
4. Before coming to the facts of the present case, it is pertinent to refer
to the relevant O.M.s issued by the Department of Expenditure, Ministry of
Finance (‘DoE’), which regulate the grant of TA.
4.1. An O.M. dated 28.01.1994 was issued by the DoE, wherein the
officers of rank of the Joint Secretary and above, were provided with an
option to avail the facility of staff car for commuting to office and residence
on prescribed payment basis.
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Digitally Signed
By:RASHMI DABAS
Signing Date:24.11.2023
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4.2. Subsequently, an O.M. dated 03.10.1997 was issued by the DOE
wherein it was provided that in case of officers of the level of Joint
Secretary, who have been provided with the facility of staff car under O.M.
dated 28.01.1994, may be given an option i.e., either to avail themselves of
the existing facility of staff car or to switch over to the payment of TA, as
admissible under these orders.
4.3. Thereafter, the DoE vide another O.M. dated 29.08.2008, modified
the O.M. dated 03.10.1997 and extended the option of availing either the car
facility or TA at the rate of ₹ 7,000/- per month, to the officers drawing GP
of ₹ 10,000/- and ₹ 12,000/- and also those in HAG + Scale, who are entitled
to the use of official car in terms of O.M. dated 28.01.1994.
5. Now adverting to the facts of this case, the Respondent herein, with
the approval of Appointments Committee of the Cabinet (‘ACC’) on
29.06.2013, was promoted to the post of Scientist ‘G’ in the scale of ₹
37,000 – 67,000 + 10,000 Grade Pay (‘GP’) with effect from 01.07.2013
under the Modified Flexible Complementing Scheme (‘MFCS’). The
Respondent herein on promotion started drawing the monthly TA of ₹
7,000/- + Dearness Allowance i.e., w.e.f. 01.07.2013.
5.1. Since, the post of Scientist ‘G’ falls under the pre-revised scale of PB-
4 with ₹ 10,000/- GP, the Petitioner, in view of O.M. dated 29.08.2008,
extended the facility of availing either staff car or TA at the rate of ₹ 7,000/-
+ Dearness Allowance per month to the Respondent herein w.e.f. July, 2013.
5.2. However, the Audit team of the office of Principal Director of Audit,
Scientific Departments, New Delhi, vide audit memo No. 39 dated
12.08.2016 raised an issue of over payment of TA to the Scientists/officers
of the level of Joint Secretary; having GP of ₹ 10,000/- and above in the
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By:RASHMI DABAS
Signing Date:24.11.2023
16:57:32
Department and advised recovery of overpaid amount from the non-entitled
officers.
5.3. In the meanwhile, the DoE vide O.M. dated 19.08.2016, issued a
clarification to the effect that the officers, who are not entitled for the use of
office car in terms of O.M. dated 28.01.1994 are not eligible to opt for
drawing of monthly TA of ₹ 7,000/- + Dearness Allowance, even though
they are drawing GP of ₹ 10,000/- in PB-4 under dynamic ACP Scheme or
under the scheme of Non-Functional Upgradation (NFU).
5.4. Thus, as per the Petitioner, the Scientists akin to the Respondent
herein were not entitled to receive TA. Accordingly, the office of the
Principal Director of Audit on 16.09.2016 forwarded the factual statement
based on the over payment of TA, incorrectly made to the Scientists ‘G’ of
the Department. The payment of TA at a higher rate had led to over payment
of ₹ 58.49 lakhs; in addition to the additional expenditure of ₹ 119.68 lakhs
for hiring of taxi(s) for non-entitled officers.
5.5. The DoE subsequently on 21.09.2017 decided to extend the facility of
use of official car in terms of O.M. dated 28.01.1994 or in lieu thereof,
monthly TA at the rate of ₹ 15,750/- + Dearness Allowance to the Scientists
‘G’, promoted under the Flexible Complementing Scheme (FCS) in Senior
Administrative Grade (SAG) drawing pay in Pay Level 14, with effect from
01.09.2017.
5.6. In view of the clarification issued by the DoE on 19.08.2016 and
advisory of the audit team, the Petitioner decided to take action for recovery
of money wherever required. A list was prepared by the Petitioner, updated
on 23.01.2018, wherein all officers including Scientist ‘G’ and above and
Statistical Advisors were included irrespective of the fact that whether they
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By:RASHMI DABAS
Signing Date:24.11.2023
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used staff car or drew high TA. The list was further modified and a list of 27
officers (21 Scientists and 6 Statistical Officers) was prepared on
06.02.2018. In view of the DoE’s subsequent decision dated 21.07.2017, the
period of excess payment was limited from September, 2008 to August
2017.
5.7. As stated earlier, the said benefit of availing TA was extended to the
Scientists ‘G’ only with effect from 01.09.2017 and therefore, the excess
payment made prior to the said period was recoverable. The Petitioner
however, in view of the fact that the Scientists ‘G’ are promoted under the
Modified Flexible Complementing Scheme with approval of ACC and are
the divisional heads holding higher responsibilities, decided to refer the
matter to DoE with a request to grant the TA to Scientists G from the date of
their promotion. However, the said proposal for waiving off recovery of the
overpaid amount towards the TA was expressly turned down by DoE.
5.8. It is pertinent to note here that Supreme Court in its landmark
judgement of State of Punjab and Ors. v. Rafiq Masih (White Washer) &
Ors., (2015) 4 SCC 334 , passed on 18.12.2014, and more specifically at
paragraph ‘18’ therein, after considering all its previous decisions
summarized few situations, wherein recoveries by the employer would be
impermissible in law.
5.9. The Department of Personnel and Training (‘DoPT’) acting upon the
said judgement in Rafiq Masih (White Washer) (supra) issued an O.M.
dated 02.03.2016 statutorily recognizing the situations enlisted by the
Supreme Court in which the recovery of excess payment shall be waived.
The said O.M. directed that waiver of recovery shall be considered in five
(5) situations covered by the said judgement and the said waiver will be
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Digitally Signed
By:RASHMI DABAS
Signing Date:24.11.2023
16:57:32
allowed with the express approval of DoE in terms of DoPT’s O.M. dated
06.02.2014.
5.10. The DoE vide order dated 11.06.2018 observed that the case of the
Respondent did not fall under any of the five (5) exceptions of the DoPT’s
O.M. dated 02.03.2016; and therefore, advised that recovery of the overpaid
TA can be made by the Administrative Department.
5.11. The DoE vide order dated 18.02.2019 reiterated that the overpayment
has been made to the Respondent from July, 2013 to August, 2017 (roughly
4 years) and since the officer will retire in the year 2026, therefore, the
recovery of the overpaid TA can be made by the Administrative
Department.
st
5.12. An order dated 25.09.2019 (1 order) was issued by the Petitioner
regarding recovery of overpaid amount of TA from the Respondent. It was
directed that the recovery of overpayment of TA amounting to ₹ 4,06,467/-
th
be made in 47 monthly instalments of ₹ 8,500/- each and 48 instalment of ₹
6,967/- from the salary of the Respondent starting from October, 2019. The
Respondent made a representation for waiving off the recovery of said
amount; however, the said representation was turned down by the DoE on
23.12.2019. Therefore, an order for recovery was issued again on
nd
07.01.2020 (2 order) on the same terms for effecting recovery starting
from January, 2020.
5.13. The Respondent made a further representation for waiver of the said
amount; however, the DoE rejected the said proposal again on 29.06.2021
on the ground that the Respondent is not covered in any of the five (5)
exceptions under the DoPT’s O.M. dated 02.03.2016.
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Digitally Signed
By:RASHMI DABAS
Signing Date:24.11.2023
16:57:32
5.14. Thereafter, the Department in furtherance of its earlier orders of
recovery dated 25.09.2019 and 07.01.2020, issued an order dated
rd
31.12.2021 (3 order) on the same terms for effecting recovery from the
salary of the Respondent starting from January, 2022 to December, 2025.
5.15. In the aforesaid facts and circumstances, the Respondent filed O.A.
No. 2944/2022, inter-alia, impugning the said recovery order dated
rd
31.12.2021 (3 order). The Tribunal by its impugned order dated 10.05.2023
set aside the recovery order dated 31.12.2021 and directed the Petitioner
herein to refund the amount already recovered from the Respondent.
Submissions of the counsel for Petitioner
6. Learned counsel for the Petitioner states that there is no dispute that
the Respondent herein is ineligible and not entitled to receive TA for the
period between July, 2013 to August, 2017 and the Respondent became
eligible for drawing TA only with effect from 01.09.2017.
6.1. He states that therefore, recovery of amount of TA on the basis of
O.M. dated 06.02.2014, which is based on the judgment of the Supreme
Court in Chandi Prasad Uniyal & Ors. v. State of Uttarakhand & Ors.,
(2012) 8 SCC 417 , passed on 17.08.2012, was permissible as no hardship
would be caused to the Respondent by such recovery.
6.2. He further states that since, the amount of TA paid by the department
and received by the Respondent is without authority of law, the Petitioner
rightly sought to recover the said amount in accordance with the law laid
down by the Supreme Court in Chandi Prasad Uniyal (supra). He states that
in the present case, there is no extreme hardship which would be caused to
the Respondent as the recovery was sought to be effected in instalments.
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Digitally Signed
By:RASHMI DABAS
Signing Date:24.11.2023
16:57:32
6.3. He states that similarly, the Tribunal failed to appreciate that the
Petitioner was entitled to recover the excess amount of TA as per O.M.
dated 02.03.2016, which has been issued on the basis of the judgement of
the Supreme Court in Rafiq Masih (White Washer) (supra) as the
Respondent herein is not covered by the five exceptions recognized in the
said judgement. In this regard, he submits as under:-
i. The Respondent is in the SAG grade; she neither belongs to
Group C or D cadre.
ii. The recovery is for the TA wrongly paid for the period July,
2013 to August, 2017, which was sought to be effected with
effect from 25.09.2019. The Respondent is due to retire in the
year, 2026.
iii. The recovery of excess payment is within five (5) years.
iv. The Respondent has not been wrongfully required to discharge
duties of a higher post and the recovery is not on account of any
payment made to her in this regard.
v. The Respondent will not suffer any extreme hardship nor such a
recovery would be unfair or unjust or arbitrary.
6.4. He states that since the Respondent was neither eligible for drawing
TA nor covered in the exceptions, the Petitioner rightly rejected her proposal
for waiver and proceeded with the recovery. He states that the recovery
order issued on 31.12.2021 is in conformity with the law laid down by the
Supreme Court and the O.M.s of DoE and DoPT. He states that however, the
Tribunal has irrespective proceeded to set aside the impugned order of
recovery.
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Digitally Signed
By:RASHMI DABAS
Signing Date:24.11.2023
16:57:32
Submissions of counsel for Respondent
7. In reply, learned counsel for the Respondent states that there is no
error in the judgment of the Tribunal. He states that the Respondent herein
falls within the fifth exception recognized by the Supreme Court in Rafiq
Masih (White Washer) (supra), wherein it was held that if the Court arrives
at a conclusion that the recovery made from the employee is iniquitous,
harsh or arbitrary then no such recovery can be effected by the employers.
7.1. He states that the issue of impermissibility of recovery of TA paid to
Grade ‘A’ officers is no longer res integra as identical issues have been
decided by this Court against the Petitioner in its judgment dated 04.09.2013
passed in W.P.(C) 5555/2013 titled as ‘ Union of India & Anr. v. J S
Sharma & Ors. ’ and judgment dated 06.01.2021 passed in W.P.(C) 23/2021
titled as ‘ Union of India & Anr. v. S P Singh & Ors. ’ .
7.2. He states therefore, the Tribunal in the impugned order has correctly
followed the law laid down by this Court in J S Sharma (supra) and rightly
concluded that the recovery of TA is improper and impermissible.
Analysis and findings
8. This Court has considered the submissions of the counsel for the
parties and perused the record.
9. The admitted facts arising for consideration in the present petition are
as follows:
(i) The Respondent is a Senior Administrative Grade (‘SAG’)
officer who was promoted to the post of Scientist ‘G’ under the
Modified Flexible Complementing Scheme (‘MFCS’) with effect
from 01.07.2013. The Respondent is an officer of the level of the
Joint Secretary.
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By:RASHMI DABAS
Signing Date:24.11.2023
16:57:32
(ii) The Respondent was not entitled to draw Transport Allowance
(TA) as per the prevalent OMs; however, the Petitioner with effect
from 01.07.2013 mistakenly made payment of TA at ₹ 7,000/- per
month to the Respondent until 31.08.2017.
(iii) The Respondent as per DoE’s order dated 21.09.2017 became
entitled to receive TA only with effect from 01.09.2017.
(iv) The issue of incorrect payment of TA was identified by the
office of the Principal Director of Audit on 16.09.2016 i.e., within
five (5) years. The overpayment to Respondent was to the tune of ₹
4,06,467/-.
(v) The Respondent is due to retire in the year 2026.
(vi) The DoE observed that since the Respondent’s case does not
fall within any of the five (5) exceptions recognized in O.M. dated
02.03.2016, issued in consonance with the judgment of the Supreme
Court in Rafiq Masih (White Washer) (supra), it directed the
Petitioner herein to initiate recovery of the excess payment.
(vii) The DoE issued directions in this regard on 11.06.2018 and
18.02.2019.
st
(viii) The Petitioner issued order dated 25.09.2019 (1 order),
wherein, overpayment was proposed to be recovered in 47 monthly
th
instalments of ₹ 8,500/- each and 48 instalment of ₹ 6,967/- w.e.f.
October 2019.
nd
(ix) The Petitioner issued 2 order dated 07.01.2020 and finally the
rd
3 order dated 31.12.2021 on the same terms for recovery in 48
instalments.
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By:RASHMI DABAS
Signing Date:24.11.2023
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st nd
(x) The implementation of 1 order and 2 order was deferred as
the Respondent made representations for waiver. The DoE rejected
the representations made by the Respondent on 25.09.2019 and
15.01.2020 for waiver of recovery of TA.
rd
(xi) The 3 order dated 31.12.2021 directed recovery of ₹
4,06,467/- in 48 instalments starting from January 2022 and the final
instalment in December 2025.
rd
10. The Respondent impugned the said 3 order dated 31.12.2021 before
the Tribunal and it is this order, which has been set aside by the Tribunal by
its impugned order.
11. The Tribunal in its impugned order noted that number of (other)
Scientists who were similarly placed as the Respondent and were wrongly
paid the TA, have been exempted from recovery of overpayment since they
were falling within the exceptions recognized by DoPT in the O.M. dated
02.03.2016, issued in pursuance to the judgment of the Supreme Court in
Rafiq Masih (White Washer) (supra).
11.1. The Tribunal returned a finding that the Respondent is not covered in
the exceptions recognized by the Supreme Court in Rafiq Masih (White
Washer) (supra). The relevant portion of the impugned judgment passed by
the Tribunal reads as under:
“ It has also been noted that the Hon’ble Supreme Court in State of Punjab
& Others etc. v. Rafiq Masih (White Washer) etc. (Civil Appeal No.
11527/2014) did not stipulate all the situations and, therefore, technically
the applicant may not be covered by the conditions as she has not retired
or about to retire within one year; and the period for which such
allowance has been paid to the applicant was not more than five years .
”
(Emphasis Supplied)
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Digitally Signed
By:RASHMI DABAS
Signing Date:24.11.2023
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11.2. The Tribunal however, held that the said recovery of overpayment is
impermissible in view of the judgment of this Court in J S Sharma (supra)
wherein the Division Bench of this Court in similar facts had upheld the
decision of the Tribunal disallowing the recovery of overpayment of TA to
Grade ‘A’ officers, who were drawing pay at par with an officer of the post
of Joint Secretary. The Tribunal was thus, of the view that the
impermissibility of recovery of overpayment of TA is a recognised
exception in view of the judgment of this Court. The relevant portion of the
judgment of the Tribunal reads as under:
“18. The respondents have looked at only the limited situation, as
indicated in their O.M. dated 02.03.2016, whereas the Hon’ble High
Court of Delhi in Union of India & another v. J S Sharma (supra) have
dealt with the case of similarly situated officers, who were granted Grade
Pay of Rs. 10000/- under Non-Functional Upgradation Scheme and
relying upon the decision of Hon’ble Supreme Court in Chandi Prasad
Uniyal & others v. State of Uttarakhand & others (2012) 8 SCC 417, it
was held as under: -
….”
(Emphasis Supplied)
11.3. In addition, the Tribunal held that the recovery order dated
31.12.2021 was bad in law since as per the law settled by Supreme Court,
the employer is not entitled to recover payments made in excess of
entitlement. The Tribunal held that this is especially so since, admittedly,
there was no irregularity on the part of the Respondent herein in drawing the
TA. The relevant portion of the judgment of the Tribunal reads as under:
“19. Apart from the technicality that the applicant does not fall in any of
the situations enlisted in O.M. dated 02.03.2016, the respondents have
obviously not considered the fundamental premises of law laid down by
the Hon’ble Apex Court that the payments, erroneously made by the
employer in excess of entitlement, cannot be recovered.
20. It is also evidence that such TA was permitted to be drawn by the
respondents and was never objected to till the audit team itself has proved
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Signing Date:24.11.2023
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that there was no irregularity on part of the applicant to draw the TA. In
the counter affidavit, this aspect has been accepted. I have also noticed
that the efforts were made specifically by the respondents to seek
clarifications and recommend the case of the applicant for waiving off to
DoE and DoPT in terms of O.M. dated 02.03.2016. Going by the
aforementioned judgments and the settled law, the recovery of TA
provided to the applicant is improper and impermissible.”
(Emphasis Supplied)
12. In the opinion of this Court, the findings returned by the Tribunal at
paragraphs 19 and 20 of the impugned order are contrary to the law laid
down by Supreme Court in Chandi Prasad Uniyal (supra), wherein the
Supreme Court held that amounts paid or received without authority of law
can always be recovered barring few exceptions of extreme hardships but
not as a matter of law. The relevant observations of the Supreme Court in
this regard are as under:
“9. Shyam Babu Verma case [(1994) 2 SCC 521: 1994 SCC (L&S) 683:
(1994) 27 ATC 121] was a three-Judge Bench judgment, in that case the
higher pay scale was erroneously paid in the year 1973, the same was
sought to be recovered in the year 1984 after a period of eleven years. The
Court felt that the sudden deduction of the pay scale from Rs 330-560 to
Rs 330-480 after several years of implementation of the said pay scale had
not only affected financially but even the seniority of the petitioners.
Under such circumstance, this Court had taken the view that it would not
be just and proper to recover any excess amount paid.
13. We are not convinced that this Court in various judgments referred
to hereinbefore has laid down any proposition of law that only if the
State or its officials establish that there was misrepresentation or fraud
on the part of the recipients of the excess pay, then only the amount paid
could be recovered . On the other hand, most of the cases referred to
hereinbefore turned on the peculiar facts and circumstances of those cases
either because the recipients had retired or were on the verge of
retirement or were occupying lower posts in the administrative hierarchy.
14. We are concerned with the excess payment of public money which is
often described as “taxpayers' money” which belongs neither to the
officers who have effected overpayment nor to the recipients. We fail to
see why the concept of fraud or misrepresentation is being brought in in
such situations . The question to be asked is whether excess money has
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been paid or not, may be due to a bona fide mistake. Possibly, effecting
excess payment of public money by the government officers may be due
to various reasons like negligence, carelessness, collusion, favouritism,
etc. because money in such situation does not belong to the payer or the
payee. Situations may also arise where both the payer and the payee are
at fault, then the mistake is mutual. Payments are being effected in
many situations without any authority of law and payments have been
received by the recipients also without any authority of law . Any amount
paid/received without the authority of law can always be recovered
barring few exceptions of extreme hardships but not as a matter of right,
in such situations law implies an obligation on the payee to repay the
money, otherwise it would amount to unjust enrichment .
15. We are, therefore, of the considered view that except few instances
pointed out in Syed Abdul Qadir case [(2009) 3 SCC 475: (2009) 1 SCC
(L&S) 744] and in Col. B.J. Akkara case [(2006) 11 SCC 709: (2007) 1
SCC (L&S) 529], the excess payment made due to wrong/irregular pay
fixation can always be recovered .”
(Emphasis Supplied)
12.1. The Supreme Court in its subsequent judgment of Rafiq Masih
(White Washer) (supra) reiterated that the benefit of non-recovery cannot be
extended to an employee merely because he was not accessory to the
mistake committed by the employer or was not guilty of furnishing any
factually incorrect information, or fraud or misrepresentation. The relevant
observations of the Supreme Court in this regard reads as under:
“6. In view of the conclusions extracted hereinabove, it will be our
endeavour, to lay down the parameters of fact situations, wherein
employees, who are beneficiaries of wrongful monetary gains at the hands
of the employer, may not be compelled to refund the same. In our
considered view, the instant benefit cannot extend to an employee merely
on account of the fact, that he was not an accessory to the mistake
committed by the employer; or merely because the employee did not
furnish any factually incorrect information, on the basis whereof the
employer committed the mistake of paying the employee more than what
was rightfully due to him; or for that matter, merely because the
excessive payment was made to the employee, in absence of any fraud or
misrepresentation at the behest of the employee .
7. Having examined a number of judgments rendered by this Court, we are
of the view, that orders passed by the employer seeking recovery of
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monetary benefits wrongly extended to the employees, can only be
interfered with, in cases where such recovery would result in a hardship
of a nature, which would far outweigh, the equitable balance of the
employer's right to recover. In other words, interference would be called
for, only in such cases where, it would be iniquitous to recover the
payment made . In order to ascertain the parameters of the above
consideration, and the test to be applied, reference needs to be made to
situations when this Court exempted employees from such recovery, even
in exercise of its jurisdiction under Article 142 of the Constitution of
India. Repeated exercise of such power, “for doing complete justice in any
cause” would establish that the recovery being effected was iniquitous,
and therefore, arbitrary. And accordingly, the interference at the hands of
this Court.
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, 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.
10. In view of the aforestated constitutional mandate, equity and good
conscience in the matter of livelihood of the people of this country has to
be the basis of all governmental actions. An action of the State, ordering
a recovery from an employee, would be in order, so long as it is not
rendered iniquitous to the extent that the action of recovery would be
more unfair, more wrongful, more improper, and more unwarranted,
than the corresponding right of the employer, to recover the amount. Or
in other words, till such time as the recovery would have a harsh and
arbitrary effect on the employee, it would be permissible in law . Orders
passed in given situations repeatedly, even in exercise of the power vested
in this Court under Article 142 of the Constitution of India, will disclose
the parameters of the realm of an action of recovery (of an excess amount
paid to an employee) which would breach the obligations of the State, to
citizens of this country, and render the action arbitrary, and therefore,
violative of the mandate contained in Article 14 of the Constitution of
India.”
(Emphasis Supplied)
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12.2. In the impugned order the Tribunal has not recorded any facts or
returned a finding that the recovery of overpayment of TA from the
Respondent shall cause extreme hardship of nature, which would eclipse the
right of the Petitioner to recover the said overpayment. Thus, the direction of
the Tribunal in setting aside the order of recovery dated 31.12.2021 does not
satisfy the test applied by the Courts while not permitting recovery by the
employer.
13. Pertinently, the Supreme Court in Rafiq Masih (White Washer)
(supra) considered and explained the judgment of Syed Abdul Qadir v. State
of Bihar, (2009) 3 SCC 475, and held that if a mistake of making a wrongful
payment is detected within five (5) years it would open to the employer to
recover the same. The relevant extract of Rafiq Masih (White Washer)
(supra) in this regard reads as under:
“13. First and foremost, it is pertinent to note, that this Court in its
judgment in Syed Abdul Qadir case [Syed Abdul Qadir v. State of Bihar,
(2009) 3 SCC 475 : (2009) 1 SCC (L&S) 744] recognised, that the issue of
recovery revolved on the action being iniquitous. Dealing with the subject
of the action being iniquitous, it was sought to be concluded, that when
the excess unauthorised payment is detected within a short period of
time, it would be open for the employer to recover the same . Conversely,
if the payment had been made for a long duration of time, it would be
iniquitous to make any recovery. Interference because an action is
iniquitous, must really be perceived as, interference because the action is
arbitrary. All arbitrary actions are truly, actions in violation of Article 14
of the Constitution of India. The logic of the action in the instant
situation, is iniquitous, or arbitrary, or violative of Article 14 of the
Constitution of India, because it would be almost impossible for an
employee to bear the financial burden, of a refund of payment received
wrongfully for a long span of time . It is apparent, that a government
employee is primarily dependent on his wages, and if a deduction is to be
made from his/her wages, it should not be a deduction which would make
it difficult for the employee to provide for the needs of his family. Besides
food, clothing and shelter, an employee has to cater, not only to the
education needs of those dependent upon him, but also their medical
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requirements, and a variety of sundry expenses. Based on the above
consideration, we are of the view, that if the mistake of making a
wrongful payment is detected within five years, it would be open to the
employer to recover the same . However, if the payment is made for a
period in excess of five years, even though it would be open to the
employer to correct the mistake, it would be extremely iniquitous and
arbitrary to seek a refund of the payments mistakenly made to the
employee.
14. …
15. …
16. This Court in Syed Abdul Qadir v. State of Bihar [Syed Abdul Qadir v.
State of Bihar, (2009) 3 SCC 475: (2009) 1 SCC (L&S) 744] held as
follows: (SCC pp. 491-92, para 59)
“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 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. The 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.”
(emphasis supplied)
Premised on the legal proposition considered above, namely, whether on
the touchstone of equity and arbitrariness, the extract of the judgment
reproduced above, culls out yet another consideration, which would
make the process of recovery iniquitous and arbitrary. It is apparent
from the conclusions drawn in Syed Abdul Qadir case [Syed Abdul
Qadir v. State of Bihar, (2009) 3 SCC 475: (2009) 1 SCC (L&S) 744],
that recovery of excess payments, made from the employees who have
retired from service, or are close to their retirement, would entail
extremely harsh consequences outweighing the monetary gains by the
employer . It cannot be forgotten, that a retired employee or an employee
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about to retire, is a class apart from those who have sufficient service to
their credit, before their retirement . Needless to mention, that at
retirement, an employee is past his youth, his needs are far in excess of
what they were when he was younger. Despite that, his earnings have
substantially dwindled (or would substantially be reduced on his
retirement). Keeping the aforesaid circumstances in mind, we are satisfied
that recovery would be iniquitous and arbitrary, if it is sought to be made
after the date of retirement, or soon before retirement. A period within one
year from the date of superannuation, in our considered view, should be
accepted as the period during which the recovery should be treated as
iniquitous. Therefore, it would be justified to treat an order of recovery,
on account of wrongful payment made to an employee, as arbitrary, if the
recovery is sought to be made after the employee's retirement, or within
one year from the date of his retirement on superannuation.”
(Emphasis Supplied)
13.1. The recovery against the Respondent in the facts of this case is
admittedly within five (5) years and there was sufficient time to
Respondent’s retirement (in 2026), when the recovery was first proposed in
18.02.2019. Thus, the order of recovery in the facts of this case is in
consonance with the law laid down by the Supreme Court in the aforesaid
judgments.
14. The Supreme Court in Rafiq Masih (White Washer) (supra) after
elaborately considering the precedents set down by the Court in its
judgments wherein the question of recovery was disallowed by the said
Court, proceeded to summarize a few situations wherein, recoveries by the
employers would be impermissible in law. The said situations are set out at
paragraph 18 of Rafiq Masih (White Washer) (supra), which reads as under
and has been adopted by the DoPT in its O.M. dated 02.03.2016:
“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
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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.
(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)
14.1. As noted hereinabove, the Tribunal in the impugned order has
returned a finding that the Respondent is not covered by the five (5)
exceptions recognized by the Supreme Court in Rafiq Masih (White
Washer) (supra) and therefore, is also not covered by the exceptions
recognized by the DoPT in its O.M. dated 02.03.2016.
However, the Tribunal has held that recovery of overpayment of TA
is not lawful as it has been recognized as an exception by the Division
Bench of this Court in J S Sharma (supra).
14.2. The Respondent during the course of arguments contended that the
Respondent falls within the exception no. (v) set out in the judgment of
Rafiq Masih (White Washer) (supra) and contended that the recovery is
iniquitous. He states that the assumption that this recovery of overpayment
of TA is iniquitous has been recognized by this Court in J S Sharma (supra)
which was followed by this Court in S P Singh (supra). He states that the
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Tribunal has correctly followed the judgments of High Court and rightly
concluded that recovery of overpayment of TA is impermissible as it is
iniquitous in view of the said judgments.
15. This Court is unable to accept the aforesaid contention of the
Respondent and the finding of the Tribunal that a presumption of inequity is
attracted ipso-facto when the employer seeks to recover the overpayment of
TA made to the employee, even though the concerned employee does not
fall within the exceptions recognized by the Supreme Court in Rafiq Masih
(White Washer) (supra). The Court has to return an explicit finding that the
recovery will cause undue hardship to the employee as contemplated in the
fifth exception. Further, the Supreme Court in the aforesaid judgment has
categorically held that if the mistake of making a wrongful payment is
detected within five (5) years, it would be open to the employer to recover
the same from the employee.
15.1. To the same effect, the Supreme Court in Chandi Prasad Uniyal
(supra) authoritatively held that if any amount is paid or received without
the authority of law, then such an amount can always be recovered barring
few exceptions of extreme hardships, but not as a matter of right. The Court
further held that in case of overpayment, the law implies an obligation on
the payee to repay the money, otherwise it would amount to unjust
enrichment.
15.2. In the facts of this case, the Tribunal has not enlisted any
circumstances, which in its opinion evidence that the Respondent would
have suffered extreme hardship if the recovery was effected against her.
Therefore, in the opinion of this Court, the Tribunal fell in error by setting
aside the order for recovery dated 31.12.2021 without returning any finding
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on extreme hardship or the recovery being iniquitous in view of judgment of
Supreme Court in Rafiq Masih (White Washer) (supra).
16. This however bring us to the issue of judgments of Division Bench of
this Court in J S Sharma (supra) and S P Singh (supra), wherein the order
of the Tribunal setting aside the recovery of overpayment of TA was upheld.
17. The Division Bench in J S Sharma (supra) upheld the order of the
Tribunal, setting aside the order of recovery of TA allowance in respect of
Grade A officers. The Division Bench after referring to the judgment of
Supreme Court in Syed Abdul Qadir (supra) and more specifically
paragraph 57 and 58 therein, concluded that the case of Grade A officers
falls in the exceptional category and thus, recovery is impermissible.
17.1. The said judgment of the Division Bench in J S Sharma (supra) was
pronounced on 04.09.2013. However, subsequently, the Supreme Court in
judgment of Rafiq Masih (White Washer) (supra), pronounced on
18.12.2014, after considering the judgment of Syed Abdul Qadir (supra)
categorically held that if the mistake of making a wrongful payment is
detected within five years, it would be open to the employer to recover the
same. In the facts of this case admittedly, the mistake of wrongful payment
has been detected within 5 years.
17.2. Therefore, in view of the subsequent judgment of the Supreme Court
in Rafiq Masih (White Washer) (supra), the judgment of J S Sharma
(supra) is no longer a binding precedent and in the considered opinion of this
Court it would be incumbent upon the Tribunal to return a finding of
extreme hardship or iniquitousness caused to the employee within the
meaning of exception no. five (5), before setting aside the order of recovery.
There is no presumption in law that recovery of the overpayment of TA is
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ipso-facto iniquitous. However, this is the effect of the judgment of the
Tribunal
18. The Respondent herein has also relied upon the judgment of the
Division Bench in S P Singh (supra), pronounced on 06.01.2021, wherein
the Division Bench following the judgment of J S Sharma (supra) in similar
facts disallowed the recovery of TA from the Chief Engineers working with
CWC.
18.1. The learned counsel for the Respondent has contended that since the
judgment of S P Singh (supra) has been passed by a Coordinate Bench, the
same is binding on this Bench.
18.2. Pertinently, the judgment of S P Singh (supra) was not relied upon by
the Tribunal in the impugned order while setting aside the order of recovery
dated 31.12.2021.
18.3. However, a perusal of the said judgment dated 06.01.2021 passed in S
P Singh (supra) would show that the judgment of the Supreme Court in
Rafiq Masih (White Washer) (supra) was not brought to the attention of the
Division Bench. In fact, the Division Bench in S P Singh (supra) dismissed
the writ petition, simpliciter holding that the issue stands covered by the
judgment in J S Sharma (supra) and therefore, the said Division Bench did
not deliberate on this issue arising for consideration in the said proceedings.
19. We regret our inability to concur with S P Singh (supra) relied upon
by the counsel for the Respondent to contend that in all circumstances,
recovery of overpayment of TA to the employee is to be presumed to be
iniquitous. As noted above, the attention of the Division Bench hearing S P
Singh (supra) was not invited to the judgment in Rafiq Masih (White
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Washer) (supra). We are therefore, not bound to follow the same in view of
the binding dicta of Supreme Court in Rafiq Masih (White Washer) (supra).
20. Therefore, in the facts of the present case, since none of the
exceptions identified by the Supreme Court in Rafiq Masih (White Washer)
(supra) are attracted and the Respondent has not brought on record any facts
which would satisfy this Court that the recovery of overpayment of TA is
iniquitous, we are of the considered opinion that the impugned order dated
10.05.2023 passed by the Tribunal cannot be sustained and is hereby set
aside. Accordingly, the DoE’s recovery order dated 31.12.2021 is hereby
upheld.
21. With the aforesaid directions, the petition stands allowed and pending
applications stand disposed of. No order as to cost.
MANMEET PRITAM SINGH ARORA, J
V. KAMESWAR RAO, J
NOVEMBER 23, 2023/ msh
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