Wrong Fixation Of Pay Scale By Employer Cannot Lead To Recovery Of Salary Or Retiral Benefits If No Misrepresentation Made By Employee: Madhya Pradesh HC

The Madhya Pradesh High Court has reiterated that on wrong fixation of pay scale, if any, done by the employer, no recovery can be done from the salary/retiral benefits if there is no misrepresentation of the employee.

The Court was dealing with a writ petition filed by a retired Subedar against recovery order passed by his employer whereby an amount of Rs.29,66,982/- was directed to be recovered from him as payment of excess salary Rs.13,01,635/- alongwith interest of Rs.16,65,347/- thereon.

The single-bench of Justice Sushrut Arvind Dharmadhikari observed, "Further, in the case of Manoj Sharma Vs. State of M.P. & Ors. Passed in W.A. No. 293/2021 dated 31/08/2021, Division Bench of this Court has held that the undertaking given by the employee is limited to the recovery of principal amount and if there was no misrepresentation on the part of the employee to retain and consume the excess amount for number of years, thus, at the time of refund, the employee ought not do be additionally burdened by recovery of interest over and above the principal amount."

The petitioner was represented by Advocate Shailesh Tiwari while the respondent was represented by Government Advocate Praveen Namdev.

 The petitioner was initially appointed in 1981 with the State of M.P. Home Department and on attaining the age of superannuation got retired from the post of Subedar (M) in 2016. According to the petitioner, in view of the fact that nature of duties viz. responsibilities and assignments of Executive and Ministerial Staff on the post of Inspector, Subedar, Sub-Inspector etc. are same, respondent No.2 issued letter in 2019 for extending similar pay scale to both the cadres which was granted to the petitioner also. However, when the petitioner got superannuated, vide the impugned order, an order of recovery of excess salary and interest thereon was issued.

Counsel for the petitioner submitted that after retirement, the services of the petitioner are governed by M.P. Civil Services (Pension Rules), 1976 wherein Rule 9(4) provides for that no coercive action of recovery whatsoever can be initiated after four years of retirement which has been done by the impugned order. It was contended that in view of Rule 9(4) of the Rules, Governor is only empowered to may recoveries from a retired employee, that too within a period of four years from the date of retirement and therefore respondents had e no jurisdiction to initiate any recovery from the petitioner. It was also submitted that petitioner’s pay scale was revised without any notice or opportunity of hearing to the petitioner. It was further submitted that on the one hand respondents/authority itself had extended similar pay scale to Executive and Ministerial Staff keeping in view their nature of duties and on the other hand had directed recovery treating it to be excess salary from the Ministerial Staff which is discriminatory, moreso when there is no misrepresentation on the part of the petitioner. He referenced a division bench ruling wherein it was held that wrong fixation of pay scale, if any, done by the employer, no recovery can be done from the salary/retiral benefits if there is no misrepresentation of the employee.

The Court at the ouset noted that the legal preposition before it is whether the order of recovery made against the petitioner towards the excess payment was justified and is sustainable in the light of judgement passed by Supreme Court in the case of Rafiq Masih (supra) and order passed by Full Bench of this Court in the case of Jagdish Prasad Dubey (supra)?

In the case of S.H. Baig (supra), the Hon’ble Supreme Court has held that parity of pay scale cannot be given to the employees even on the principle of equal pay for equal work. Since, the method of recruitment, qualification for appointment, duties and responsibilities of Ministerial and Executive Staff being different, Ministerial employees are not entitled for claiming parity of pay scale with the Executive Staff.

"So far as the contention of the counsel for the petitioner that recovery cannot be effected in the light of judgement passed by the Supreme Court in the case of Rafiq Masih (supra) as well as this High Court in the case of Jagdish Prasad Dubey (supra) is concerned, this Court is of the opinion that in the light of judgement passed by Hon’ble Supreme Court in the case S.H. Baig (supra), the submissions made by learned counsel for the petitioner is misconceived and liable to be rejected", the Court observed.

However, it pointed out that the excess payment, which was made to the petitioner was on account of mistake of some calculation by the Authorities, but at the same time, it was not made to the petitioner on account of any misrepresentation on her part.

"The judgement passed in the case of S.H. Baig (supra) was delivered after coming into existence of the judgement of Rafiq Masih (supra). Since, the order passed by Hon’ble Supreme Court in the case of S.H. Baig (supra) deals with the issue in question, therefore, doctrine of stare decisis applies herein and judgment passed by Hon’ble Supreme Court is binding upon this Court", it added.

In light of Sushma Tiwari (supra), the court was of the considered opinion that the entitlement of the petitioner to get adhoc increase can be considered by the respondents if applicable to the petitioner. It rejected Counsel for the petitioner's submissions on the ground that Rule 9(4) of M.P. Pension Rules, 1976 pertains to departmental proceedings arose from any misconduct and negligence on the part of the employee.

"The facts of the instant case is altogather different and has already been settled by the pronouncement of Hon’ble Supreme Court in the case of S.H. Baig (supra)," the Court concluded.

It so ruled that the excess payment was not made by the respondents on the basis of any misrepresentation on the part of the petitioner and recovery of the excess amount after such a longtime with interest would be very harsh on the petitioner, accordingly, the respondent cannot recover the interest on the principal amount.

 The petition was accordingly allowed.

Cause Title: Smt Parwati Verma vs The State of Madhya Pradesh

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