Bench : Jagdish Singh Khehar, Arun Mishra.
Civil Appeal No. 11527 of 2014
Statement of Facts
In the present case, the Court has decided number of Civil appeals arising same issues for its consideration. Thus, the facts of all those appeals were considered by the Court for deciding controversies among the parties. The Private Respondents were employees in all these cases. The controversies were arose from the fact that, the monetary benefits were given to each and every Respondents in these cases, to which they were not entitled due to mistake committed by the concerned Competent Authority while settling emoluments which were payable to such Respondents. The order of recovery of such excess amount was made against these Respondents, which resulted in the disputes. However, the Respondents being employees had not been guilty of furnishing to the concerned Competent Authority any incorrect information due to which the concerned Competent Authority would have committed mistake in making excess payment to them. Not even any fraud was committed or misrepresentations were made by these Respondents in order to compel that concern Competent Authority to make higher payment to what they are entitled to.
The disputes were to referred to the Hon’ble High Court of Punjab and Haryana. The High Court considered the matters and decided that the order of recovery of such exceeded amount paid to Respondents-Employees should not survive and as such the said order was quashed by that Hon’ble High Court. As such the matter was appealed before this Hon’ble Supreme Court of India by way of Special Leave Petition.
The issued was considered essential to be determined before this Hon’ble Court was, whether all such Respondents should be required to exempt under Law from the liability of reimbursement of excess amount to the Employer.
So far as the applicability of that order of recovery is concerned, the Court observed the question that, only by reason of the fact that, the amounts of monetary benefits were released on the basis of mistake committed by the concerned Competent Authority and the Respondents-Employees played nothing in determination of those benefits, can Respondent assert that they should be exempted from refunding the excess amount which was received by them. The Court had pointed that, the Respondents – Employees should not be allowed to take benefit of excess amount only on account of the fact that, such employees were not playing any part in commission of mistake by Employer thereof or even on the ground that such employees had not furnished any incorrect information based on which the Employer committed such mistake as to payment additional to which such employees were entitled. The Court after having gone through number of decisions made by it, had given a consider opinion that the orders of recovery of such excess of amount made by the Employer could be dealt and interfered with only in case where such orders of recovery resulted in hardship of such nature that would outweigh the equitable right of Employer as to recovery. As such the orders of recovery can only be interfered when such orders iniquitous to recovery of payment made earlier.
Similarly, the Court had pointed that, when the dispute between tow parties is decided in favour of one, who is weaker without any serous result in favour of other, which was the welfare State, the dispute would be said to have resolved in consistent with the concept of Justice. Thus, right of Employer as to such recovery should have to be considered with its comparative effect on Employees. When such effect of recovery resulted in more unfair, wrongful or improper then it would be arbitrary. The Court, further, had discussed the doctrine of equality as a part of Article 14 to 18 of the Constitution of India, under the heading of Fundamental Rights. These provisions of Constitution ensure equal treatment amongst equal set of people and prohibit discrimination in achieving equality in cases of employment. The doctrine was further, embodied under Articles 38, 39, 39 A, 43 and 46 of the Constitution of India under the head of Directive Principles of State Policy. Thus, the Court considered that, in the view of aforesaid Constitutional provisions the State is required to act in pursuance with the equity and good conscience in the matters of livelihood of people of the Country and it should, while ordering recovery from employee, see the order should not render iniquitous so far as it extents to more unfair, wrongful, etc. than the corresponding right of the employer. The Court had further, referred certain judgements of Hon’ble Supreme Court itself, leads to the precedents, where Court had disallowed such recovery claims. Firstly, the Court had referred the Syed Abdul Qadir’s case, where the Court had recognized, that the question of recovery revolved on the action being iniquitous. It was found impossible for the employees under such situations to bear the financial burden, so as to refund the payment which was received due to mistaken on part of employer, after a long span of time has elapsed. As such the Court held that if such mistake is detected within a period of five years, then only it will be open to Employer concerned, to recover the same excess amount. Similarly, in Shyam Babu Verma’s Case it was held that, the amount recovery claim after laps of several years of implementation of the pay-scale would not be just and proper. The Court in Col. B. J. Akkara’s case observed that the right as to recovery in such situation, would be sustainable so long as the same not arbitrary or iniquitous. Thus, the Court had satisfactorily concluded that, the recovery in such situation from the lower rungs employees, should not be subjected to the ordeal of any recovery as it would be arbitrary and result in breach of provision of Article 14 of the Constitution of India. As such the Court found that, if the recovery was intended to be made after retirement date or even soon before retirement of employees, then such recovery would be iniquitous and arbitrary. Lastly, the Court had referred Sahib Ram Verma’s case, where it was observed that, by wrongly extending revised pay scale the mistake was committed and the Court held denied the recovery of the excess payment. Hence, the Court had summarised the situations where the recoveries can be denied. And thus, the Hon’ble Supreme Court, in these present matters, upheld the decision of Hon’ble High Court of Punjab and Haryana and as such prohibited the recovery of such excess amounts.
The State has its existence because of certain elements, including population, which is of greater importance in all other elements. And if rightly of such population either alone or in group is violated by State itself, then the significance of population as an element of State will be of null meaning as such, their rights are to be protected by the State and not to be violated. The Hon’ble Supreme Court, in this matter has very precisely dealt with the situation of recoveries of amount paid in excess to the employees by the employer due to mistake committed by concerned competent authority. The Court has rightly considered that, the matter is closely connected with Fundamental rights of citizens and also is subjected to directive principles of State policy as the rights of employees are involved, who may either have belonged to poor sections, weaker sections or otherwise and to prevent violation of equality right guaranteed under Constitution being fundamental right, the action of such recovery from the weaker section could not be justified. The Court therefore, rightly concluded after having considered various precedents of landmark nature, that the recovery of such excess amount should not be permitted. As such the judgment in this matter is highly effective so far as such future controversies are concerned.
by Faim Khalilkhan Pathan.
- Syed Abdul Qadir v. State of Bihar, (2009) 3 SCC 475.
- Shyam Babu Verma v. Union of India (1994) 2 SCC 521.
- Col. B.J. Akkara v. Government of India, (2006) 11 SCC 709.
- Sahib Ram Verma v. Union of India, (1995) Supp. 1 SCC 18.
- See Paragraph 12 of the Judgment.
- See Paragraph 9 of the Judgment.