M.S. Ramachandra Rao, CJ
1. The petitioner is a Diploma Holder (Civil Engineer) and he was appointed as a Junior Engineer in the Himachal Pradesh Public Works Department in 1991 on daily wage basis.
2. Subsequently, he was appointed on contract basis w.e.f. 1996 till February, 2004 and then from 28.02.2004, he was appointed on regular basis as Junior Engineer in the said Department, which is a Class-III post.
3. The petitioner was allowed regular increments from time to time, including Assured Career Progression Scheme.
4. He was also granted periodical increments from 2012, but vide Annexure A-3 proceedings dt. 23.02.2018, the petitioner was informed that his pay was fixed on notional basis upto 08.08.2012 and on actual basis w.e.f. 09.08.2012, and proposing to make recovery of the amount paid as increments from 2012.
5. The petitioner contends that the said recovery cannot be effected since he had not made any misrepresentation or fraud, and in view of the judgment of the Supreme Court in State of Punjab versus Rafiq Masih (White Washer) (2015) 4 SCC 334 recovery of the increments paid by mistake ought not to be permitted.
6. Reliance is also placed on an order passed by the erstwhile H.P. Administrative Tribunal (for short the “Tribunal”) in O.A. no.4098 of 2018, dt. 18.07.2018, in the case of Narinder Sharma versus State of Himachal Pradesh and others.
7. The Tribunal, which was approached by the petitioner initially in O.A. no.4647 of 2018, granted stay of recovery.
8. Thereafter, the matter was transferred to this High Court on the abolition of the Tribunal and the case was renumbered as CWPOA no.4968 of 2020.
9. Reply is filed by the respondents, contending that though the services of the petitioner were regularized on 28.02.2004 as Junior Engineer, he had wrongly been granted the benefit of Assured Career Progression Scheme upon completion of 8 years service in the cadre under the Scheme dt. 04.08.2001 framed by the 3rd respondent.
10. According to the respondents, the category of Junior Engineers would be entitled for the benefit of additional increment upon completion of 8 years service in the cadre under the separate Scheme dt. 04.08.2001 exclusively made for the category of the Junior Engineers; therefore, the benefit under two different schemes cannot be made applicable simultaneously to persons like the petitioner; and since this was pointed out by the Audit Department much prior to his retirement on 30.09.2024, recovery is justified.
11. It is asserted that re-fixation of pay of the petitioner was made strictly as per order/instructions of the Government issued from time to time and benefits wrongly given on higher side can be withdrawn as and when it comes to the notice of the competent authority.
12. Reliance is placed on the judgment of the Supreme Court in Chandi Prasad Uniyal & Others versus State of Uttarakhand & Others. (2012) 8 SCC 417.
13. While admitting that the petitioner belongs to Class-III category, it is contended that the petitioner was wrongly given the benefit of new Assured Career Progression Scheme and so the same was rightly withdrawn and recovery is being proposed.
Consideration by the Court
14. We have noted the contentions of both the parties.
15. The fact that the petitioner belongs to Class-III category employee, is admitted by the respondents.
16. It is also not the case of the respondents that on account of any fraud or misrepresentation made by the petitioner, the Assured Career Progression Scheme benefit was given to him in addition to the increments.
17. Therefore, in our considered opinion, the case of the petitioner is covered by the judgment in Rafiq Mashih’s case (supra) cited by the counsel for the petitioner.
18. There was a difference of opinion in the cases of Shaym Babu Verma versus Union of India(1994) 2 SCC 521 , and Sahib Ram versus The State of Haryana (1995) Suppl.1 SCC 18 and the judgment in Chandi Prasad Uniyal’s case (supra) as to whether employees should be allowed to retain the benefit conferred on them by mistake by the employer or not.
19. While in the first two cases it was held that there has to be no recovery, in Chandi Prasad Uniyal’s case it was held that recovery was permissible.
20 This conflict view was noticed by the Supreme Court in Rakesh Kumar versus State of Haryana (2014) 8 SCC 892 , and the matter was referred to larger Bench.
21. The larger Bench of the Supreme Court in State of Punjab versus Rafiq Masih (2014) 8 SCC 883 , however, took the view that there was no conflict between the two, and it was held that the decisions were based some on Article 136 of the Constitution of India and the other on Article 142 of the Constitution of India, respectively, and there is no conflict inter se.
22. Thereafter, the case of Rafiq Masih (1 supra) was decided by two Judge Bench of the Supreme Court, which laid down the following Principles:-
“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 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.”
23. This judgment considered the judgment in Chandi Prasad Uniyal’s case (2 supra) also and the decision of the larger Bench, and interpreted the same in the manner indicated above.
24. Having regard to the law laid down therein that where payments were mistakenly made by an employer in excess of entitlement of Government employees, recovery is impermissible, if they belong to Class-III category, and since the petitioner belongs to such a Class-III category, we hold that no recovery can be made from him.
25. Accordingly, the writ petition is allowed and the impugned order dt. 23.02.2018 (Annexure A-3) is set aside.
26. Pending miscellaneous application(s), if any, shall also stand disposed of.
