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REPORTABLE

       IN THE SUPREME COURT OF INDIA

 CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No. 3500 OF 2006

HIGH COURT OF PUNJAB & HARYANA        .....APPELLANTS & ORS         

Versus  

JAGDEV SINGH      .....RESPONDENT  

J U D G M E N T

Dr. D Y CHANDRACHUD, J          

1 The High Court of Punjab and Haryana allowed, by its judgment

dated 1 August 2005, a petition filed by the Respondent under Article 226

of  the  Constitution  to  challenge  a  direction  issued by the  State  to  the

Accountant General for the recovery of an excess payment towards salary.

2 The facts lie in a narrow compass. The Respondent was appointed

as a Civil Judge (Junior Division) on 16 July 1987 and was promoted as

Additional Civil Judge on 28 August 1997 in the judicial service of the

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State.  By  a  notification  dated  28  September  2001,  a  pay  scale  of

Rs. 10000-325-15200 (senior scale) was allowed under the Haryana Civil

Service (Judicial Branch) and Haryana Superior Judicial Service Revised

Pay Rules 2001. Under the rules, each officer was required to submit an

undertaking that any excess which may be found to have been paid will be

refunded to the Government either by adjustment against future payments

due or otherwise.  

3 The  Respondent  furnished  an  undertaking  and  was  granted  the

revised pay scale and selection grade of Rs. 14300-400-18000-300. While

opting for the revised pay scale, the Respondent undertook to refund any

excess payment  if  it  was so detected and demanded subsequently. The

revised pay scale in the selection grade was allowed to the Respondent on

7 January 2002.  

4 The Respondent was placed under suspension on 19 August 2002

and  eventually, was  compulsorily  retired  from service  on  12  February

2003.

5 In the meantime, this Court in Civil Writ (C) 1022 of 1989 accepted

the  recommendations  of  the  First  National  Judicial  Pay  Commission

(Shetty  Commission).  Thereupon,  the  Haryana  Civil  Services  (Judicial

Branch) and Haryana Superior Judicial Service Revised Pay Rules 2003

were notified on 7 May 2003.

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6 In view thereof the pay scales of judicial officers in Haryana were

once  again  revised  with  effect  from 1 January  1996.  An exercise  was

undertaken for adjustment of excess payments made to judicial officers,

following the notification of the revised pay rules.  On 18 February 2004,

a letter for the recovery of an amount of Rs. 1,22,003/- was served upon

the  Respondent  pursuant  to  the  direction  of  the  Registrar  of  the  High

Court.

7 The  Respondent  challenged  the  action  for  recovery  in  writ

proceedings under Article 226. The petition was allowed by the impugned

judgment  of  the  High  Court.  The  High  Court  found  substance  in  the

grievance of the Respondent that the excess payment made to him towards

salary and allowance prior to his retirement could not be recovered at that

stage, there being no fraud or misrepresentation on his part.  

8 The  order  of  the  High  Court  has  been  challenged  in  these

proceedings. From the record of the proceedings, it is evident that when

the  Respondent  opted  for  the  revised  pay  scale,  he  furnished  an

undertaking to  the effect  that  he would be liable  to refund any excess

payment made to him.  In the counter affidavit which has been filed by the

Respondent  in  these  proceedings,  this  position  has  been  specifically

1admitted.  Subsequently,  when  the  rules  were  revised  and  notified  on

7 May 2003 it was found that a payment in excess had been made to the

1 (2015) 4 SCC 334

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Respondent. On 18 February 2004, the excess payment was sought to be

recovered in terms of the undertaking.  

9 The submission of the Respondent,  which found favour with the

High Court, was that a payment which has been made in excess cannot be

recovered from an employee who has retired from the service of the state.

This,  in  our  view, will  have  no  application  to  a  situation  such  as  the

present where an undertaking was specifically furnished by the officer at

the time when his pay was initially revised accepting that any payment

found to have been made in excess would be liable to be adjusted. While

opting for the benefit of the revised pay scale, the Respondent was clearly

on notice of the fact that a future re-fixation or revision may warrant an

adjustment of the excess payment, if any, made.  

10 In State of Punjab & Ors etc. vs. Rafiq Masih (White Washer) etc1.  this

Court  held  that  while  it  is  not  possible  to  postulate  all  situations  of

hardship where payments have mistakenly been made by an employer, in

the  following  situations,  a  recovery  by  the  employer  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.

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(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.”                     (emphasis supplied).

11 The principle enunciated in proposition (ii) above cannot apply to a

situation such as in the present case. In the present case, the officer to

whom the payment was made in the first instance was clearly placed on

notice that  any payment found to have been made in excess would be

required to be refunded. The officer furnished an undertaking while opting

for the revised pay scale. He is bound by the undertaking.  

12 For these reasons, the judgment of the High Court which set aside

the action for recovery is unsustainable. However, we are of the view that

the recovery should be made in reasonable instalments. We direct that the

recovery be made in equated monthly instalments spread over a period of

two years.

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13 The judgment of the High Court is accordingly set aside. The Civil

Appeal shall stand allowed in the above terms. There shall be no order as

to costs.     

                                                       .......................................CJI                         [T S  THAKUR]  

                                                            ..............................................J          [Dr D Y  CHANDRACHUD]

New Delhi JULY 29, 2016.