This petition has been filed with the prayer to quash the impugned order dated 16.11.2017 and 20.12.2016 passed by respondent no.4 whereby recovery of an amount of Rs.8,17,371/- from the gratuity amount of the petitioner has been made and also to command the respondents to release the gratuity amount.
Learned counsel for the petitioner has submitted that vide the impugned orders, the recovery of an amount of Rs.8,17,371/- from the gratuity amount of the petitioner has been made on the ground that the same had wrongly been paid to the petitioner due to wrong calculation by the respondents. Learned counsel appearing for the petitioner has vehemently submitted that the said order is contrary to the law laid down by Hon'ble the Apex Court in the case of State of Punjab and others Vs. Rafiq Masih (White Washer) reported at (2015) 4 SCC 334 wherein it has held that no recovery can be made from the retrial dues of the petitioner, even if the excess amount is paid without any fault on the part of the employee. Learned counsel submits that the petitioner was superannuated on 31.12.2016 after attaining the age of superannuation but till date, no gratuity amount has been paid to the petitioner.
Learned counsel for opposite parties has vehemently opposed the submissions of the learned counsel for petitioner and submitted that the petitioner has given his consent that the recovery of the excess amount paid be made from the retiral dues as he was very well aware of the wrong fixation, as such, now he is debarred from claiming the same. It has further been submitted that while scrutinizing the matter of fixation of pension of the petitioner ambiguities were detected and thus, the order of recovery was passed. It is submitted that the gratuity amount of the petitioner was Rs.6,58,665/- whereas the recovery amount was Rs.8,17,371/-. It is also submitted that from the arrears of the seventh pay commission, Rs.80,040/- has also been recovered and Rs.78,666/- is still to be recovered from the petitioner. Learned Standing Counsel submits that there is no illegality in the impugned orders and the petition is liable to be dismissed.
We have considered the submissions of the parties and gone through the record.
The core question for determination involved in the present writ petition is that whether the payment made on account of wrong fixation of pay can be recovered from retiral dues of the petitioner or not, that too after his retirement from service and whether the orders impugned in the present writ petition have correctly been passed considering the judgment of the Hon'ble Apex Court in case of Rafiq Masih (supra).
Hon'ble Apex Court in the judgment of Rafiq Masih (supra) after considering the matter in detail has been pleased to observe in para 10 that 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 obligation of the State. The para 10 of the said judgment, on reproduction, reads as under:
10. In view of the afore-stated 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."
The Hon'ble Apex court after considering various judgments of the Apex Court in regard to recovery of the excess amount paid to the employee held that recovery of excess payments made from employees who have retired from service, or are close to their retirement, would entail extremely harsh consequences outweighing the monetary gains by the employer with the following emphasis:
"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's case (supra), that recovery of excess payments, made from 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 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 of the date of his retirement on superannuation."
After detailing the issue in detail the Hon'ble Apex Court summarizes the few situations wherein recovery by the employer were emphazied in para-12 of the judgment, which is reproduced:
"12. 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 herein above, we may, as a ready reference, summarise the following few situations, wherein recoveries by the employers, would be impermissible in law:
(i) Recovery from employees belonging to Class-III and Class-IV service (or Group ''C' and Group ''D' service).
(ii) Recovery from retired employees, or employees who are due to retire within one year, of the order of recovery.
(iii) Recovery from employees, when the excess payment has been made for a period in excess of five years, before the order of recovery is issued.
(iv) Recovery in cases where an employee has wrongfully been required to discharge duties of a higher post, and has been paid accordingly, even though he should have rightfully been required to work against an inferior post.
(v) In any other case, where the Court arrives at the conclusion, that recovery if made from the employee, would be iniquitous or harsh or arbitrary to such an extent, as would far outweigh the equitable balance of the employer's right to recover."
The above situations described in paragraph 12 of the judgment of the Hon'ble Apex court are binding as they have been issued under Article 142 of the Constitution of India and in view thereof the recovery from retired employees or employees who are due to retire within one year, order of recovery is impermissible in law and accordingly, the same cannot be made.
In view of the above, I am of the considered opinion that the recovery of Rs.8,17,370/- made from the gratuity of the petitioner is not impermissible under law as held by the Hon'ble Apex Court in case of Rafiq Masih (supra).
Accordingly, the writ petition is allowed and the impugned orders dated 16.11.2017 and 20.12.2016 passed by respondent no.4 is hereby quashed and the opposite parties are directed to refund the recovered amount to the petitioner within a period of two month from the date of receipt of a certified copy of this order.
No order as to costs.
Order Date :- 27.1.2021 VNP/-