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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL     APPEAL     NO.     5899     OF     2012   @   Special Leave Petition (C) No. 30858/2011

(with I.A. Nos.2 and 3)

Chandi Prasad Uniyal  & Ors.   .. Appellants

Versus

State of Uttarakhand & Ors. .. Respondents

J     U     D     G     M     E     N     T   

K.     S.     RADHAKRISHNAN,     J.   

1. Leave granted.

2. The question that arises for consideration in this appeal is whether  

over-payment of amount due to wrong fixation of 5th and 6th pay scale of  

teachers/principals based on the 5th Pay Commission Report  could be  

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recovered from the recipients who are serving as teachers.  The Division  

Bench of the High Court rejected the writ petition filed by the appellants  

and took the view that since payments were effected due to a mistake  

committed  by  the  District  Education  Officer,  the  same  could  be  

recovered.   Aggrieved  by  the  said  judgment,  this  appeal  has  been  

preferred.   

3. Shri Shivam Sharma, learned counsel appearing for the appellants,  

fairly submitted that the payments were effected due to a mistake but not  

due to any misrepresentation or fraud committed by the appellants and  

hence  the  decision  taken  to  recover  the  amount  is  not  legal.   For  

establishing his contention, reliance was placed on several judgments of  

this Court like Shyam Babu Verma v. Union of India [(1994) 2 SCC  

521], Sahib Ram v. State of Haryana [1995 Supp (1) SCC 18], State  

of  Bihar  v.  Pandey  Jagdishwar  Prasad [(2009)  3  SCC  117]  and  

Yogeshwar  Prasad  and  Ors  v.  National  Institute  of  Education  

Planning and Administration and Ors. [(2010) 14 SCC 323].

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4. Mrs.  Rachana  Srivastava,  learned  counsel  appearing  for  the  

respondent-State, took us through the counter affidavit filed by the State  

before this Court and submitted that the over-payment was effected due  

to wrong fixation of pay.  Learned counsel also submitted that where the  

payments have been made under a bona fide mistake, the beneficiaries  

have no right to retain the same.  Learned counsel placing reliance on  

the judgment of this Court in Col. B.J. Akkara (retd.) v. Government  

of India and Ors. [(2006) 11 SCC 709] submitted that the High Court  

has correctly exercised its discretion in rejecting the writ petition after  

having found that the payments were effected due to wrong fixation of  

pay scale and this Court under Article 136 of the Constitution of India  

shall  not  interfere  with the discretion exercised by the Hon’ble  High  

Court.  Reliance was also placed on another judgment of this Court in  

Syed Abdul Qadir and Ors. v. State of Bihar and Ors. [(2009) 3 SCC  

475] and submitted that this court granted relief in that case since many  

of the teachers had retired from the service while in the present case all  

the appellants are still in service.

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5. Parties  are  not  in  conflict  on  facts,  however  reference  to  few  

essential  facts  are  necessary  for  a  proper  disposal  of  this  appeal.  

Appellants,  herein,  had  filed  the  writ  petition  before  the  High Court  

seeking  a  writ  of  certiorari  to  quash,  an  inter-departmental  

communication dated 24.10.2009 followed by a letter dated 18.11.2009  

issued by the District Education Officer to the Manager/Principal of few  

Sanskrit Colleges in Hardwar where excess payments were made due to  

wrong fixation  of  pay.   The operative  portion  of  the  communication  

dated 24.10.2009 reads as follows:

“Through this meeting it has come to my knowledge that  there is no similarity in the fixation of revised 5th pay scale  throughout  the  State.   Some  of  the  District  Education  Officers have not taken into consideration the letters issued  by this office and fixed pay scales as a result there is no  similarity  in  the  fixation  of  pay  scale  and  therefore  confusion  has  arisen  among  the  different  classes  of  teachers.   For  adjudication  of  the  same  and  to  bring  similarity  in  the  fixation  of  pay  scale  and  to  avoid  any  difficulty in the future, again you are hereby directed about  the pay fixation through enclosures.   If  pay fixation has  been done by you as per the letters of this office then it is  O.K. otherwise it will be fixed later on.  If it has been fixed  already, then the remaining salary can only be paid after  availability  of  the  amount  in  this  office  and  you  are  requested to send demand letter to this office for release of  

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the  remaining  amount.   In  case  of  fixation  of  payment  contrary to the letters of this office, the remaining amount  be not released.”

6. Further,  in  the  letter  dated  18.11.2009,  the  District  Education  

Officer had informed the Manager / Principal of the colleges as follows:

“With this letter a copy of model pay fixation form is being  forwarded towards you so that you may ensure the correct  fixation of 5th & 6th pay scale of the teachers/principals of  your schools.  You are requested to kindly fix the pay scale  as per model pay fixation form.  You are further requested  to kindly make ensure to make available the revised pay  scale  form  and  service  register  to  the  finance  officer,  school  education  Hardwar  and  the  undersigned  as  early  possible.   Only  thereafter  the  salary  of  the  concerned  principals/teachers shall be issued and further deposit the  challan in respect of excess payment in the treasury.  The  teachers whose pay has been wrongly fixed are as follows:-

1. Sh.  Jagdish  Prasad,  Teacher  (Literature),  Sh.  Jagdevsingh Sanskrit Mahavidhyalaya, Hardwar ;

2. Sh.  Markandey Prasad Semwal,  Teacher,  Sh.  Udashin  Sanskrit Mahavidhyalaya, Hardwar ;

3. Sh.  Chandi  Prasad  Uniyal,  Principal,  Sh.  Nirmal  Sanskrit Mahavidhyalaya, Kankhal, Hardwar.”

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Appellants herein are some of the teachers named in that letter; similar  

communications  had gone to  few other  institutions,  where  appellants  

work.

7. We may point out indisputedly, the appellants 1 and 2 herein were  

not in the pay scale of Rs.4,250-6,400 as such they could not have got  

the revised pay scale of Rs.10,000-15,200/- w.e.f. 01.07.2001.  Only if  

they were  getting  pay scale  of  Rs.8000-13,500/-  on 01.01.1996,  they  

would have been entitled to be placed in the pay scale of 10,000-15,200  

as on 01.07.2001.  Further, appellants 3 to 5 were working as Assistant  

Teachers and drawing in pay scale of Rs.3,600-5,350/- as on 01.01.1996  

and were placed in the pay scale of Rs.5,500-9,000 as on 01.07.2001.  

Further,  it  was  noticed  that  none  of  the  appellants  were  working  as  

principals and were never placed in the pay scale of 8,000-15,500 as on  

01.01.1996 to get the benefit of the pay scale of 10,000-15,200 as on  

01.07.2001.  We also find only few persons like the appellants have been  

getting higher pay scale in the district of Haridwar w.e.f. 01.07.2001 and  

similarly situated persons in the rest of Uttarakhand are getting the same  

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pay  scale  of  Rs.10,000-15,200  only  from  11.12.2007  and  it  was  to  

rectify this anomaly, the District Education Officer, Haridwar passed the  

order dated 24.10.2009.

8. We may also indicate that when the revised pay scale/pay fixation  

was fixed on the basis  of  the 5th Central  Pay Scale,  a  condition was  

superimposed which reads as follows:

“In  the  condition  of  irregular/wrong  pay  fixation,  the  institution shall be responsible for recovery of the amount  received in excess from the salary/pension.”

The appellants are further bound by that condition as well.  The facts,  

mentioned hereinabove, would clearly demonstrate that the excess salary  

was paid due to irregular/wrong pay fixation by the concerned District  

Education Officer.  The question is whether the appellants can retain the  

amount  received  on  the  basis  of  irregular/wrong  pay  fixation  in  the  

absence of any misrepresentation or fraud on their part, as contended.   

9. We  are  of  the  considered  view,  after  going  through  various  

judgments cited at the bar, that this court has not laid down any principle  

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of law that only if there is misrepresentation or fraud on the part of the  

recipients of the money in getting the excess pay, the amount paid due to  

irregular/wrong fixation of pay be recovered.

10. Shyam  Babu  Verma case (supra)  was  a  three-Judge  Bench  

judgment, in that case the higher pay scale was erroneously paid in the  

year 1973, the same was sought to be recovered in the year 1984 after a  

period of eleven years.  The court felt that the sudden deduction of the  

pay  scale  from  Rs.330-560  to  Rs.330-480  after  several  years  of  

implementation of said pay scale had not only affected financially but  

even  the  seniority  of  the  petitioners.   Under  such  circumstance,  this  

Court had taken the view that it would not be just and proper to recover  

any excess amount paid.

11. In  Sahib  Ram  case (supra),  a  two-Judge  Bench  of  this  Court  

noticed  that  the  appellants  therein  did  not  possess  the  required  

educational qualification and consequently would not be entitled to the  

relaxation but having granted the relaxation and having paid the salary  

on the revised scales, it was ordered that the excess payment should not  

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be recovered applying the principle of equal pay for equal work.  In our  

view,  this  judgment  is  inapplicable  to  the  facts  of  this  case.     In  

Yogeshwar Prasad case (supra), a two-Judge Bench of this Court after  

referring to the above mentioned judgments took the view that the grant  

of  higher  pay  could  not  be  recovered  unless  it  was  a  case  of  

misrepresentation or fraud.  On facts, neither misrepresentation nor fraud  

could  be  attributed  to  appellants  therein  and  hence,  restrained  the  

recovery of excess amount paid.

12. We may in this respect refer to the judgment of two-Judge Bench  

of this Court in Col. B.J. Akkara (retd.) case (supra) where this Court  

after referring to  Shyam Babu Verma case,  Sahib Ram case  (supra)  

and few other decisions held as follows:

“Such relief, restraining recovery back of excess payment,  is  granted  by  courts  not  because  of  any  right  in  the  employees, but in equity, in exercise of judicial discretion,  to relieve the employees,  from the hardship that will  be  caused if recovery is implemented. A Government servant,  particularly one in the lower rungs of service would spend  whatever  emoluments  he receives for  the upkeep of  his  family. If he receives an excess payment for a long period,  he would spend it genuinely believing that he is entitled to  it. As any subsequent action to recover the excess payment  

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will cause undue hardship to him, relief is granted in that  behalf.  But where the employee had knowledge that the  payment  received  was  in  excess  of  what  was  due  or  wrongly paid, or where the error is detected or corrected  within  a  short  time  of  wrong payment,  Courts  will  not  grant relief against recovery. The matter being in the realm  of  judicial  discretion,  courts  may  on  the  facts  and  circumstances of any particular case refuse to grant such  relief against recovery.”

13. Later,  a  three-Judge  Bench  in  Syed Abdul  Qadir  case (supra)  

after referring to  Shyam Babu Verma, Col. B.J. Akkara (retd.)  etc.  

restrained the department from recovery of excess amount paid, but held  

as follows:

“Undoubtedly, the excess amount that has been paid to the  appellants  -  teachers  was  not  because  of  any  misrepresentation or fraud on their part and the appellants  also had no knowledge that the amount that was being paid  to them was more than what they were entitled to. It would  not  be  out  of  place  to  mention  here  that  the  Finance  Department  had,  in  its  counter  affidavit,  admitted  that  it  was a bona fide mistake on their part. The excess payment  made was the result of wrong interpretation of the rule that  was applicable to them, for which the appellants cannot be  held responsible. Rather, the whole confusion was because  of  inaction,  negligence  and  carelessness  of  the  officials  concerned of the Government of Bihar.  Learned Counsel  appearing  on behalf  of  the  appellants-teachers  submitted  that majority of the beneficiaries have either retired or are  

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on the verge of it. Keeping in view the peculiar facts and  circumstances  of  the  case  at  hand  and  to  avoid  any  hardship to the appellants-teachers, we are of the view that  no recovery of the amount that has been paid in excess to  the appellants-teachers should be made.

(emphasis added)”  

14. We may point out that in Syed Abdul Qadir case such a direction  

was given keeping in view of the peculiar facts and circumstances of  

that case since the beneficiaries had either retired or were on the verge of  

retirement and so as to avoid any hardship to them.   

15. We are not convinced that this Court in various judgments referred  

to hereinbefore has laid down any proposition of law that only if the  

State or its officials establish that there was misrepresentation or fraud  

on the part of the recipients of the excess pay, then only the amount paid  

could be recovered.  On the other hand, most of the cases referred to  

hereinbefore  turned  on  the  peculiar  facts  and circumstances  of  those  

cases  either  because  the  recipients  had  retired  or  on  the  verge  of  

retirement  or  were  occupying  lower  posts  in  the  administrative  

hierarchy.   

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16. We are concerned with the excess payment of public money which  

is often described as “tax payers money” which belongs neither to the  

officers who have effected over-payment nor that of the recipients.  We  

fail  to  see  why  the  concept  of  fraud  or  misrepresentation  is  being  

brought  in  such  situations.   Question  to  be  asked  is  whether  excess  

money has been paid or not may be due to a bona fide mistake. Possibly,  

effecting excess payment of public money by Government officers, may  

be  due  to  various  reasons  like  negligence,  carelessness,  collusion,  

favouritism etc. because money in such situation does not belong to the  

payer or the payee.  Situations may also arise where both the payer and  

the payee are at fault, then the mistake is mutual.  Payments are being  

effected in many situations without any authority of law and payments  

have been received by the recipients also without any authority of law.  

Any  amount  paid/received  without  authority  of  law  can  always  be  

recovered  barring  few exceptions  of  extreme  hardships  but  not  as  a  

matter of right, in such situations law implies an obligation on the payee  

to repay the money, otherwise it would amount to unjust enrichment.

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17. We are, therefore, of the considered view that except few instances  

pointed out in Syed Abdul Qadir case (supra) and in Col. B.J. Akkara  

(retd.) case (supra),  the excess payment made due to wrong/irregular  

pay fixation can always be recovered.   

18. Appellants in the appeal will not fall in any of these exceptional  

categories, over and above, there was a stipulation in the fixation order  

that in the condition of irregular/wrong pay fixation, the institution in  

which the appellants were working would be responsible for recovery of  

the  amount  received  in  excess  from  the  salary/pension.   In  such  

circumstances, we find no reason to interfere with the judgment of the  

High Court.  However, we order the excess payment made be recovered  

from the appellant’s salary in twelve equal monthly installments starting  

from October 2012.  The appeal stands dismissed with no order as to  

costs.  IA Nos.2 and 3 are disposed of.

…………………………………….........J. (K.S. Radhakrishnan)

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………………………………………………J. (Dipak Misra)

New Delhi, August 17,  2012  

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