State Not Justified In Ordering Recovery Of Benefit Granted By It Due To Its Own Mistake: Supreme Court

The Supreme Court has observed that the State is not justified in ordering recovery of the benefit granted by it because of its own mistake.

The Bench of Justice MR Shah and BV Nagarathna made this observation while dealing with the appeals filed by M.P. Medical Officers Association and other individual members of the Association.

The case in brief is that the members of the appellant Association and other appellants were working as Specialists and Dental Specialists under the M.P. Public Health and Family Welfare (Gazetted) Service Recruitment Rules, 1988.

The State issued an order on August 2008 to grant higher pay-scale on completion of six years to the Medical Officers, Dental Surgeons and officers working in the Specialist cadre in a four tier pay-scales. Later, the circular dated May 23, 2009 was issued to the effect that the period from the date of appointment shall be counted as notional appointment though the benefit of the scheme shall be granted from the date of issuance of the order of the State Government in 2008.

Having found that the circular dated May 23, 2009 was wrongly issued and was issued without approval of the Finance Department and it was found that the said circular was issued by the authority, who had no competence, therefore the said circular came to be withdrawn.

However, the respective Medical Officers-members of the appellant association were granted the actual benefit flowing from the circular dated May 23, 2009 till the said circular was withdrawn.

As the benefits were wrongly paid, the State Government ordered recovery of the excess amount paid alongwith the interest.

This decision was challenged before the Single Judge of the High Court who went onto quash the communication withdrawing the circular. The Single Judge also quashed the orders of recovery of the excess amount paid alongwith the interest.

However this decision of the Single Judge was completely overturned by the Division Bench.

Aggrieved, the M.P. Medical Officers Association and other individual members of the Association approached Supreme Court.

Senior Advocate P.S. Patwalia, appeared on behalf of the Appellant and Additional Advocate General Saurabh Mishra, appeared on behalf of the Respondent -State.

The Supreme Court observed that the Division Bench of the High Court was justified in quashing and setting aside the judgment and order passed by the Single Judge quashing the communication withdrawing the circular dated May 23, 2009.

However the Court expressed that the Division Bench had erred in quashing and setting aside the Order passed by the Single Judge allowing the writ petitions and setting aside the recovery of excess amount paid for the period between 2009 to 2012.

"It was the Department/State, who issued the circular dated 23.05.2009 and paid the benefits under the circular dated 23.05.2009 to the members of the appellant association, which subsequently came to be withdrawn by the State in the year 2012. Therefore, as such, there was neither any misrepresentation on the part of the concerned employees – members of the appellant association nor can the mistake be attributed to them. The mistake, if any, can be said to be that of the Department/State, who issued the circular dated 23.05.2009 under which the members of the association were given certain benefits till the same was withdrawn in the year 2012.", the Court noted.

"Therefore, in the peculiar facts and circumstances of the case, the State was not justified in ordering recovery of the excess amount paid along with the interest.", the Court added further.

Hence, the Court set aside the judgment and order passed by the Division Bench upholding the recovery of the excess amount paid alongwith interest.

Cause Title- M.P. Medical Officers Association v. The State of Madhya Pradesh & Ors.  

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