Summary
The Supreme Court set aside orders directing retired Stenographers and a Personal Assistant of the District Judiciary, Cuttack, to refund arrears paid to them in 2017 on a retrospective promotion, holding that excess payments made without fraud or misrepresentation by the employee, on an interpretation later found erroneous, cannot be recovered from non-gazetted employees years later and after their retirement, particularly without a hearing.
Issues
- Whether recovery of financial benefits paid to the appellants in 2017 while in service, on a retrospective promotion later found to rest on an erroneous interpretation of the Shetty Commission recommendations, is justified after their retirement in 2020 and without affording them an opportunity of hearing.
- Whether the undertakings furnished by the appellants to refund any excess amount estop them from challenging the recovery.
Held
- The question was not the legality of the retrospective promotion and financial benefit, but only whether recovery of amounts paid to the employees while in service is justified after their retirement and without any opportunity of hearing. (¶ 7)
- Following Sahib Ram, Shyam Babu Verma, M. Bhaskar, V. Gangaram and Thomas Daniel, where excess emoluments were not paid on account of any misrepresentation or fraud by the employee, and the excess arose from the employer applying a wrong principle or a particular interpretation of a rule or order later found erroneous, the excess is not recoverable. This relief is granted not as a right of the employee but in equity, in exercise of judicial discretion to relieve hardship; the situations listed in Rafiq Masih (Class III/IV employees, retired employees, payments spanning more than five years, and other iniquitous recoveries) were reiterated. (¶¶ 8, 9, 10)
- On the facts, the payment was made in 2017 to ministerial, non-gazetted Stenographers without any fraud or misrepresentation on their part, the benefit was apparently later not approved by the High Court, recovery was directed only in 2023 after the appellants had retired in 2020, and admittedly no hearing was given before the recovery orders. Applying the settled principles, the recovery was unsustainable. (¶¶ 11, 12)
Result
Appeal allowed; High Court judgment dated 09.11.2023 set aside; consequently the orders dated 12.09.2023 and 08.09.2023 directing the appellants to deposit the excess drawn arrears also set aside.