We are concerned with the excess payment of public money which is often described as “tax payers money” which belongs neither to the officers who have effected over-payment nor that of the recipients. We fail to see why the concept of fraud or misrepresentation is being brought in such situations. Question to be asked is whether excess money has been paid or not may be due to a bona fide mistake. Possibly, effecting excess payment of public money by 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 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.
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C.A. No. 5899 of 2012 - Chandi Prasad Uniyal Vs. State of Uttarakhand, (2012) 8 SCC 417 : JT 2012 (7) SC 460 : 2012 (7) SCALE 376
REPORTABLE
IN THE SUPREME COURT OF INDIA
Chandi Prasad Uniyal & Ors. .. Appellants
Versus
State of Uttarakhand & Ors. .. Respondents
K. S. RADHAKRISHNAN, J.
1. Leave granted.
2. The question that arises for consideration in this appeal is whether
over-payment of amount due to wrong fixation of 5
th
and 6
th
pay scale of
teachers/principals based on the 5
th
Pay Commission Report could be
recovered from the recipients who are serving as teachers. The Division
Bench of the High Court rejected the writ petition filed by the appellants
and took the view that since payments were effected due to a mistake
committed by the District Education Officer, the same could be
recovered. Aggrieved by the said judgment, this appeal has been
preferred.
3. Shri Shivam Sharma, learned counsel appearing for the appellants,
fairly submitted that the payments were effected due to a mistake but not
due to any misrepresentation or fraud committed by the appellants and
hence the decision taken to recover the amount is not legal. For
establishing his contention, reliance was placed on several judgments of
this Court like Shyam Babu Verma v. Union of India [(1994) 2 SCC
521], Sahib Ram v. State of Haryana [1995 Supp (1) SCC 18], State
of Bihar v. Pandey Jagdishwar Prasad [(2009) 3 SCC 117] and
Yogeshwar Prasad and Ors v. National Institute of Education
Planning and Administration and Ors. [(2010) 14 SCC 323].
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4. Mrs. Rachana Srivastava, learned counsel appearing for the
respondent-State, took us through the counter affidavit filed by the State
before this Court and submitted that the over-payment was effected due
to wrong fixation of pay. Learned counsel also submitted that where the
payments have been made under a bona fide mistake, the beneficiaries
have no right to retain the same. Learned counsel placing reliance on
the judgment of this Court in Col. B.J. Akkara (retd.) v. Government
of India and Ors. [(2006) 11 SCC 709] submitted that the High Court
has correctly exercised its discretion in rejecting the writ petition after
having found that the payments were effected due to wrong fixation of
pay scale and this Court under Article 136 of the Constitution of India
shall not interfere with the discretion exercised by the Hon’ble High
Court. Reliance was also placed on another judgment of this Court in
Syed Abdul Qadir and Ors. v. State of Bihar and Ors. [(2009) 3 SCC
475] and submitted that this court granted relief in that case since many
of the teachers had retired from the service while in the present case all
the appellants are still in service.
5. Parties are not in conflict on facts, however reference to few
essential facts are necessary for a proper disposal of this appeal.
Appellants, herein, had filed the writ petition before the High Court
seeking a writ of certiorari to quash, an inter-departmental
communication dated 24.10.2009 followed by a letter dated 18.11.2009
issued by the District Education Officer to the Manager/Principal of few
Sanskrit Colleges in Hardwar where excess payments were made due to
wrong fixation of pay. The operative portion of the communication
dated 24.10.2009 reads as follows:
“Through this meeting it has come to my knowledge that
there is no similarity in the fixation of revised 5
th
pay scale
throughout the State. Some of the District Education
Officers have not taken into consideration the letters issued
by this office and fixed pay scales as a result there is no
similarity in the fixation of pay scale and therefore
confusion has arisen among the different classes of
teachers. For adjudication of the same and to bring
similarity in the fixation of pay scale and to avoid any
difficulty in the future, again you are hereby directed about
the pay fixation through enclosures. If pay fixation has
been done by you as per the letters of this office then it is
O.K. otherwise it will be fixed later on. If it has been fixed
already, then the remaining salary can only be paid after
availability of the amount in this office and you are
requested to send demand letter to this office for release of
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the remaining amount. In case of fixation of payment
contrary to the letters of this office, the remaining amount
be not released.”
6. Further, in the letter dated 18.11.2009, the District Education
Officer had informed the Manager / Principal of the colleges as follows:
“With this letter a copy of model pay fixation form is being
forwarded towards you so that you may ensure the correct
fixation of 5
th
& 6
th
pay scale of the teachers/principals of
your schools. You are requested to kindly fix the pay scale
as per model pay fixation form. You are further requested
to kindly make ensure to make available the revised pay
scale form and service register to the finance officer,
school education Hardwar and the undersigned as early
possible. Only thereafter the salary of the concerned
principals/teachers shall be issued and further deposit the
challan in respect of excess payment in the treasury. The
teachers whose pay has been wrongly fixed are as follows:-
1. Sh. Jagdish Prasad, Teacher (Literature), Sh.
Jagdevsingh Sanskrit Mahavidhyalaya, Hardwar ;
2. Sh. Markandey Prasad Semwal, Teacher, Sh. Udashin
Sanskrit Mahavidhyalaya, Hardwar ;
3. Sh. Chandi Prasad Uniyal, Principal, Sh. Nirmal
Sanskrit Mahavidhyalaya, Kankhal, Hardwar.”
Appellants herein are some of the teachers named in that letter; similar
communications had gone to few other institutions, where appellants
work.
7. We may point out indisputedly, the appellants 1 and 2 herein were
not in the pay scale of Rs.4,250-6,400 as such they could not have got
the revised pay scale of Rs.10,000-15,200/- w.e.f. 01.07.2001. Only if
they were getting pay scale of Rs.8000-13,500/- on 01.01.1996, they
would have been entitled to be placed in the pay scale of 10,000-15,200
as on 01.07.2001. Further, appellants 3 to 5 were working as Assistant
Teachers and drawing in pay scale of Rs.3,600-5,350/- as on 01.01.1996
and were placed in the pay scale of Rs.5,500-9,000 as on 01.07.2001.
Further, it was noticed that none of the appellants were working as
principals and were never placed in the pay scale of 8,000-15,500 as on
01.01.1996 to get the benefit of the pay scale of 10,000-15,200 as on
01.07.2001. We also find only few persons like the appellants have been
getting higher pay scale in the district of Haridwar w.e.f. 01.07.2001 and
similarly situated persons in the rest of Uttarakhand are getting the same
pay scale of Rs.10,000-15,200 only from 11.12.2007 and it was to
rectify this anomaly, the District Education Officer, Haridwar passed the
order dated 24.10.2009.
8. We may also indicate that when the revised pay scale/pay fixation
was fixed on the basis of the 5
th
Central Pay Scale, a condition was
superimposed which reads as follows:
“In the condition of irregular/wrong pay fixation, the
institution shall be responsible for recovery of the amount
received in excess from the salary/pension.”
The appellants are further bound by that condition as well. The facts,
mentioned hereinabove, would clearly demonstrate that the excess salary
was paid due to irregular/wrong pay fixation by the concerned District
Education Officer. The question is whether the appellants can retain the
amount received on the basis of irregular/wrong pay fixation in the
absence of any misrepresentation or fraud on their part, as contended.
9. We are of the considered view, after going through various
judgments cited at the bar, that this court has not laid down any principle
of law that only if there is misrepresentation or fraud on the part of the
recipients of the money in getting the excess pay, the amount paid due to
irregular/wrong fixation of pay be recovered.
10. Shyam Babu Verma case (supra) 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 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.
11. In Sahib Ram case (supra), a two-Judge Bench of this Court
noticed that the appellants therein did not possess the required
educational qualification and consequently would not be entitled to the
relaxation but having granted the relaxation and having paid the salary
on the revised scales, it was ordered that the excess payment should not
be recovered applying the principle of equal pay for equal work. In our
view, this judgment is inapplicable to the facts of this case. In
Yogeshwar Prasad case (supra), a two-Judge Bench of this Court after
referring to the above mentioned judgments took the view that the grant
of higher pay could not be recovered unless it was a case of
misrepresentation or fraud. On facts, neither misrepresentation nor fraud
could be attributed to appellants therein and hence, restrained the
recovery of excess amount paid.
12. We may in this respect refer to the judgment of two-Judge Bench
of this Court in Col. B.J. Akkara (retd.) case (supra) where this Court
after referring to Shyam Babu Verma case, Sahib Ram case (supra)
and few other decisions held as follows:
“Such relief, restraining recovery back 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 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.”
13. Later, a three-Judge Bench in Syed Abdul Qadir case (supra)
after referring to Shyam Babu Verma, Col. B.J. Akkara (retd.) etc.
restrained the department from recovery of excess amount paid, but held
as follows:
“Undoubtedly, the excess amount that has been paid to the
appellants - 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. Learned Counsel
appearing on behalf of the appellants-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 appellants-teachers, we are of the view that
no recovery of the amount that has been paid in excess to
the appellants-teachers should be made.
(emphasis added)”
14. We may point out that in Syed Abdul Qadir case such a direction
was given keeping in view of the peculiar facts and circumstances of
that case since the beneficiaries had either retired or were on the verge of
retirement and so as to avoid any hardship to them.
15. 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 on the verge of
retirement or were occupying lower posts in the administrative
hierarchy.
16. We are concerned with the excess payment of public money which
is often described as “tax payers money” which belongs neither to the
officers who have effected over-payment nor that of the recipients. We
fail to see why the concept of fraud or misrepresentation is being
brought in such situations. Question to be asked is whether excess
money has been paid or not may be due to a bona fide mistake. Possibly,
effecting excess payment of public money by 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 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.
17. We are, therefore, of the considered view that except few instances
pointed out in Syed Abdul Qadir case (supra) and in Col. B.J. Akkara
(retd.) case (supra), the excess payment made due to wrong/irregular
pay fixation can always be recovered.
18. Appellants in the appeal will not fall in any of these exceptional
categories, over and above, there was a stipulation in the fixation order
that in the condition of irregular/wrong pay fixation, the institution in
which the appellants were working would be responsible for recovery of
the amount received in excess from the salary/pension. In such
circumstances, we find no reason to interfere with the judgment of the
High Court. However, we order the excess payment made be recovered
from the appellant’s salary in twelve equal monthly installments starting
from October 2012. The appeal stands dismissed with no order as to
costs. IA Nos.2 and 3 are disposed of.
…………………………………….........J.
(K.S. Radhakrishnan)
13Page 14
………………………………………………J.
(Dipak Misra)
New Delhi,
August 17, 2012
14
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