As common questions of fact and law are involved in these batch of petitions, the same were heard together and are being disposed of by this common judgment and order.
2. The short point involved in this batch of petitions is as to, whether the respondents committed substantial error of law in deducting the amount of higher pay scale which was granted in favour of the petitioners at the time of their retirement from their provident fund on the premise that they were not entitled to the benefit of higher pay scale as there was stepping up and stepping up would amount to promotion disentitling an employee to receive higher pay scale.
3. The petitioners joined the services in the Sales Tax Department and were promoted way back in the years 1968 to 1970 and retired from service as Sales Tax Inspectors. The Finance Department issued a Government Resolution dated 12.12.1998 removing anomaly of pay between the Junior Clerks and Senior Clerks who came to be promoted to the post of Sales Tax Inspectors and consequential order was passed by the Commissioner of Sales Tax giving effect of selection grade and stepping up of the salary and the Commissioner of Sales Tax passed an order on 29.6.1974 wherein it was clarified very specifically that their posting as Junior Clerk with selection grade was not of higher responsibility or higher post.
4. The Finance Department introduced a scheme of higher grade scale firstly by Resolution dated 5.7.1991 and modified the said Resolution by another Resolution dated 16.8.1994.
5. The Commissioner of Sales Tax passed an order granting higher grade scale to the petitioners working as Sales Tax Inspectors in the year 1992. However, it appears that the Finance Department did not approve the same and modified the order granting higher grade scale on 11.12.1995 by stating that the stepping up of pay and grant of selection grade were promotions. Such modification was challenged before this Court and this Court quashed the order dated 11.12.1995 by judgment dated 30.1.1996 rendered in Special Civil Application No.12 of 1996 on the ground that the petitioners were not given any opportunity of hearing. Thus, without expressing any opinion on merits as regards legality and validity of the order dated 11.12.1995 the order was quashed. Thereafter opportunity was given to the petitioners and a fresh order dated 9.9.1998 came to be passed by the Commissioner of Sales Tax granting higher grade scale to the petitioners on condition of refund and recovery of the amount paid by way of grant of selection grade and stepping up of pay in the year 1973-74, which order was received by some of the petitioners on 15.9.1998. All these petitions were filed some time in the month of October 1998 or thereafter.
6. Learned counsel Mrs Mehta appearing for the petitioners of SCA Nos.359 of 1999 and 3264 of 1997 and learned advocate Mr Biren Vaishnav appearing for the petitioners of SCA No.8892 of 1998 and 601 of 2002 contended that recovery of first higher pay scale already granted since 1992-93 could not have been recovered as Rule 57A(ii) of the Bombay Civil Services Rules provides that the Government servant cannot be called upon to refund the overpayment on account of pay and allowances which has been given to him by any order or rule. Rule 57A(ii) reads as under :-
"57-A(i) Notwithstanding the provisions contained in these rules, the pay of a Government servant whose promotion or appointment to a post is found to be or to have been erroneous on the basis of facts, i.e. incorrect seniority, failure to apply any relevant rules of orders correctly, shall be regulated in accordance with any general or special orders issued by the Government in this behalf.
(ii) When any rule or order regulating pay is made with retrospective effect, the pay of a Government servant affected by such order or rule shall be fixed notionally as if the rule, order were applicable in his case but the Government servant concerned shall not be called upon to refund the resultant amount of overpayment on account of pay and allowances."
7. Learned counsels submitted that under Rule 57A(ii) once by Government Resolution dated 5.7.1991 the pay was regulated with retrospective effect and was fixed as if the said Resolution was applicable and the orders were passed for giving relevant pay scale, the petitioners cannot be called to refund the overpayment on account of such pay and allowances. Mrs Mehta submitted that the recovery of the first higher pay scale now being made in view of the order dated 18.12.1995 and order dated 9.9.1998 in case of other petitioners is illegal, ultra vires and violative of Rule 57A of the Bombay Civil Services Rules. It is also submitted that the action of the respondents is also contrary to Rules 41A and 51 of the Bombay Civil Services Rules. Mrs Mehta also submitted that even the second higher pay scale which is already recovered from the General Provident Fund of the petitioners by order dated 6.9.1994 is illegal, ultra vires and bad in law as violative of Rule 57A of the Bombay Civil Services Rules. It is submitted that the same is also illegal, ultra vires and contrary to the Government Resolution dated 5.7.1991 and even the subsequent Resolution dated 16.8.1994. It is contended vehemently that if without hearing the petitioners the advantage is taken away, the same is violative of rules of natural justice. Mrs Mehta also contended that even assuming that the petitioners higher pay scale was required to be cancelled on the ground of the resolution of the Finance Department in case the petitioners were not entitled to the higher pay scale on the basis of 9 years and 18 years service in accordance with the Government Resolution dated 5.7.1991 and even if it is assumed without admitting that stepping up amounts to promotion, still the benefit could not have been withdrawn by way of deducting the said amount from the provident fund of each of the petitioners on their retirement. According to the learned counsel appearing for the respective parties, the issue is squarely covered by a Division Bench judgment of this Court rendered in Letters Patent Appeal No.750 of 2003 in Special Civil Application No.6006 of 2002 dated 16.12.2004.
8. Ms Maithali Mehta, learned AGP appearing for the respondents contended that the action of the Government in withdrawing the benefit of effecting recovery of the excess amount paid to the petitioners is in accordance with law and cannot be termed as illegal or arbitrary. Relying on the affidavit-in-reply filed by the Sales Tax Officer, the learned AGP submitted that stepping up would amount to promotion and once this benefit is being given, an employee is not entitled to higher pay scale.
9. It appears that an identical issue had been the subject matter of adjudication by a learned Single Judge of this Court (Coram: Jayant Patel, J.) in a batch of three petitions being Special Civil Application Nos.6006 to 6008 of 2002. The short facts in the said petitions were that the petitioners were serving as Sales Tax Officers in the Sales Tax Department of the State Government. They retired from service in the year 2001. The State Government passed Resolution dated 5.7.1991 and pursuant to said resolution such petitioners were granted higher grade of pay scale with effect from 1.6.1987 and the amounts due were paid to the petitioners. Thereafter another resolution came to be passed on 11.12.1995 whereby the higher grade of pay scale granted to such petitioners came to be cancelled and the amounts paid were sought to be recovered which action was the subject matter of challenge. The learned Single Judge took the view that pursuant to the decision of the higher authority the pay scale in the higher grade was granted to all such petitioners and after a period of about more than four years the decision was taken of cancelling the earlier decision and as a consequence thereof recovery could not have been effected. The learned Single Judge also recorded a finding that it was not the case of the respondents that the higher pay scale came to be granted on account of fraud or misrepresentation or any misdeed which could be attributed to the concerned employee. The learned Single Judge observed that it is on account of subsequent change of decision by the authority without attributing anything to the concerned employee the decision was cancelled and the recovery was sought to be effected. Under such circumstances, the learned Single Judge proceeded to examine as to whether such an act on the part of the respondents is permitted under law or not. The learned Single Judge concluded by holding as under :-
8. In case of I.C.Patel (supra) the division bench of this court observed as under:
"The mistake was committed by the Board for which the appellant should not be penalised. Recovery of excess payment made to the appellant for no fault on his part appears to be wholly unjustified."
In case of P.H.Reddy (supra) the Apex Court also found that the order of fixation passed by the appropriate authority does not require any interference. Still however, the Apex Court observed as under:
"The employees-appellant, who had been in receipt of a higher amount on account of erroneous fixation by the authority should not be asked to repay the excess pay drawn, and therefore, that part of the order of the authority is set aside."
9. In the above view of the matter, I find no further discussion is required since the question is squarely covered by the decision of the Division Bench of this court as well as of the Apex Court.
10. In view of the aforesaid discussion, all these petitions succeed. The impugned orders of recovery of amounts which are challenged in respective petitions are quashed and set aside and the petitions are allowed to the aforesaid extent. It is made clear that if any amount of retiral benefits is withheld on account of the impugned decision of recovery of amounts, same shall be released forthwith in accordance with law. Rule in each petition is made absolute accordingly. There shall be no order as to costs.
10. It appears that the State Government in its Finance Department being aggrieved by the aforesaid judgment and order of the learned Single Judge preferred Letters Patent Appeal No.750 of 2003. The Division Bench vide judgment and order dated 16.12.2004 confirmed the view taken by the learned Single Judge and dismissed the appeals preferred by the State Government holding as under :-
" 9. From the Judgment of the learned Single Judge it is clear that by playing fraud or misrepresentation or their misdeed the original petitioners have not obtained the benefit of higher pay scale. Therefore, in absence of any mala fide intention on the part of the original petitioner they cannot be made to suffer later on and that too after a period of 4 years. It may be stated that the Ist resolution was passed in 1991 which was later on cancelled by the State Government after a period of 4 years i.e. in 1995 as, if no sufficient recovery was sought to be made from the original petitioner by the State Government after a period of six years of passing of the said Resolution in 1995, that too, after the petitioners retired from the service. Under the circumstances, when the learned Single Judge has exercised discretion in favour of the original petitioners and allowed the writ petition and quashed and set aside the impugned orders of recovery, then certainly this Court will not interfere with such discretionary order passed by the learned single Judge, in this LPA.
10. In view of the above discussion, all the Appeals, filed by the appellant
- State of Gujarat, fail and are hereby dismissed. Once the Appeals are dismissed, all the three Civil Applications No.3733, 3738 and 3728, all of 2003, filed by the Appellants - applicants - State of Gujarat, seeking stay against the order passed by the learned Single Judge are also hereby dismissed and the ad.interim relief, granted earlier, shall stand vacated forthwith. Once the Civil Applications No.3733, 3738 and 3728, all of 2003, for interim relief filed by the applicants - State of Gujarat are dismissed then other three Civil Applications, viz. Civil Applications No.4940. 4941 and 4929, all of 2004, filed by the original petitioners for vacating the interim relief, will not survive any more with the dismissal of the main Appeals filed by the Appellant - State of Gujarat and, accordingly, those three Civil Applications are also stand disposed of. However, there shall be no order as to cost on these applications.
11. At this stage a request is made by learned Counsel Shri Supehia for the respondents - original petitioners that the Appellant
- State of Gujarat be directed to release all the benefit to the original petitioners immediately which they have withheld so far. With the dismissal of Appeals, the appellant - State of Gujarat is bound to release all the benefit to the respondents - original petitioners, as ordered by the learned Single Judge, as early as possible and not later than 31.3.2005."
11. The record reveals that the State Government being aggrieved by the judgment and order dated 16.12.2004 passed by a Division Bench in Letters Patent Appeal No.750 of 2003 preferred Special Leave to Appeal (Civil) No.6775-6777/2005. Hon'ble Apex Court, after condoning the delay, dismissed the special leave petitions observing that in view of the facts and circumstances of the case, the Court was not inclined to interfere in exercise of power under Article 136 of the Constitution.
12. Reliance has also been placed in a very recent pronouncement of this Court rendered by a learned Single Judge (Coram: M.R. Shah, J.) in Special Civil Application Nos.7391 to 7409 of 2009 with Special Civil Application Nos.10206 to 10222 of 2009 dated 15.6.2010. The learned Single Judge dealing with an identical issue and relying on the Supreme Court decision in the case of Bharat Sanchar Nigam Ltd. & Anr. vs. BPL Mobile Cellular Ltd. & Ors. reported in 2008 AIR SCW 6743 took the view that the authorities could not have effected recovery out of the difference of amount paid by mistake in absence of any allegation of fraud and/or misrepresentation on the part of the employees. I find it profitable to quote paras 32, 33, 34 and 35 of the said judgment, which are as follows :-
"32. Even otherwise and assuming that there was mistake committed by the board in granting the benefit of first higher grade from the post of Tradesman to the respective petitioners from the date of their completion of 9 years as Khalasi, in that case, also can the respondent board be permitted to have the recovery of the difference of amount paid by mistake in absence of any allegation of fraud and / or misrepresentation on the part of the respective petitioners. It is submitted that the mistake which is alleged was on the part of the department in wrong fixation and the petitioners were not at all responsible for such a mistake and, therefore, as held by the Hon'ble Supreme Court in the case reported in SHYAM BABU VERMA AND OTHERS VS. UNION OF INDIA AND OTHERS reported in (1994) 2 SCC 521; SAHIB RAM VS. STATE OF HARYANA AND OTHERS reported in 1995 Supp (1) SCC 18; unreported judgment of the Division Bench of this Court in the case of I.C.PATEL VS. GUJARAT HOUSING BOARD dated 04.04.2001 in LPA No.578 of 2002 in SCA No.2196 of 1999 and the decision of the Hon'ble Supreme Court in the case of PURSHOTTAM LAL DAS AND OTHERS VS. THE STATE OF BIHAR AND OTHERS reported in 2006 AIR SCW 5325 and another decision in the case of COL.B.J.AKKARA (RETD.) VS.GOVERNMENT OF INDIA AND OTHERS reported in (2007) 1 SCC (L&S) 529, the impugned orders passed by the department to recover the amount of excess payment made due to wrong fixation/grant of higher grade deserve to be quashed and set aside.
33. Para 13 and 14 of Special Civil Application Nos. 7006 of 2009 to 7011 of 2009 are reproduced as under:
"13. It is not in dispute that the respective petitioners were not, in any way, responsible for such wrong fixation/grant of higher grade of which the recovery order is passed. It is not the case on behalf of the respondent that the respective petitioners made a wrong representation due to which the higher grade was granted to them. It appears that it was the mistake on the part of the department in wrong fixation/grant of higher grade of Trademan for which, the petitioners are not at all responsible.
14. The Hon'ble Supreme Court in the aforesaid decisions which are relied upon by the learned advocate appearing on behalf of the petitioner had occasion to deal with the facts where recoveries were effected from the employee concerned due to excess payments which were made wrongly and/or difference amount of salary which was paid to the employee concerned by mistake of department and for which it has been found that there was no fault on the part of the employee.
14.2 In the case of Purshottam Lal Das and others (supra), the Hon'ble Supreme Court, while dealing with the case of recovery of excess salary paid where the appellants were already promoted and had worked in promotional posts but the promotions were subsequently found to be improper and the appellants were found to be not at fault, directed that there shall be no recovery to be made from the amounts already paid in respect of the promotional posts.
14.3 Similarly in the case of P.H.Reddy and others, where it was found that the employees had been in receipt of a higher amount on account of erroneous fixation by the authority, the Hon'ble Supreme Court set aside the order of recovery against payment of salary on account of erroneous fixation by the authority on the ground that the employees were not at fault.
14.4 In the case of Col. B.J.Akkara (Retd.) (supra), the Hon'ble Supreme Court has laid down the following conditions while observing that if such conditions are fulfilled, there can be relief against recovery of excess wrong payment of emoluments/allowances from an employee.
(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.
14.5 "Even in the case of I.C.Patel (supra) before the Division Bench, it was the case of recovery of excess amount paid to the employee by mistake committed by the Board and it was found that the recovery of the excess payment made to the appellant for no fault on his part as unjustified. Subsequently, the learned Single Judge of this Court in the case of Secretary, Finance Department vs. M.M.Patel and others (supra) relying upon the decision of the Division Bench in the case of I.C.Patel (supra) and the decision of Hon'ble Supreme Court in the case of P.H.Reddy (supra) set aside the order of recovery of excess payment made to the employee which was paid because of mistake committed by the department".
34. "It is to be noted that in the present case when there is no fraud and/or misrepresentation alleged against the respective petitioners, the impugned orders passed by the respondent so far as recovery of excess amount paid due to alleged wrong fixation / grant of higher grade scale is concerned, is even otherwise deserves to be quashed and set aside."
35. In view of the above and for the reasons stated above, all the petitions succeed and the impugned orders canceling / withdrawing the first higher grade scale of the post of Tradesman to the respective petitioners on completion of their 9 years of service on the post of Khalasi and to re-fix their pay as per the subsequent Government Resolution of 1998 and also the order with respect to recovery and the excess amount are hereby quashed and set aside. Rule is made absolute to the aforesaid extent in each of the petitions. No costs."
13. In view of the undisputed facts which I have recorded and the position of law which appears to be well settled, I am left with no other option but to allow these petitions holding that the decision and action of the respondents in deducting the amount received by way of higher grade scale from the provident fund of each of the petitioners at the time of their retirement is illegal and contrary to the well settled position of law as laid down by this Court as well as the Apex Court.
14. In the result, the petitions succeed. The impugned orders in each of the petitions under challenge are quashed and set aside. The respondents are directed to refund the amount deducted from the provident fund of each of the employees (petitioners) at the time of their retirement i.e. the amount received by each of the petitioners towards higher pay which was sanctioned in their favour, with simple interest at the rate of 9% per annum within a period of three months from the date of receipt of this judgment. Rule is made absolute accordingly.
(J.B.
PARDIWALA, J.) zgs/-
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