2025:HHC:29130 IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA CWP No.8577 of 2023 Date of Decision: 28.8.2025 _____________________________________________________________________ Amar Chand ……...Petitioner Versus State of Himachal Pradesh and Ors. …....Respondents Coram Hon’ble Mr. Justice Sandeep Sharma, Judge. Whether approved for reporting? For the Petitioner: Mr. Hamender Singh Chandel and Mr. Ashir Kaith, Advocates. For the respondents: Mr. Anup Rattan, Advocate General with Mr. Rajan Kahol and Mr. B.C. Verma, Additional Advocates General, for respondents No. 1 and 2/State. Mr. Mukul Sood, Advocate, for respondent No.3. ___________________________________________________________________________ Sandeep Sharma, J. (Oral) Precisely, the grouse of the petitioner, as has been highlighted in the petition and further canvassed by Mr. Hamender Singh Chandel, learned counsel for the petitioner is that amount now sought to be recovered from order laid challenge in the instant proceedings was being paid to the petitioner since year 2009, but now after his retirement, same is sought to be recovered, which is impermissible in view of law laid down by Hon’ble Apex Court in C.A. No. 004989 of 2025 (arising out of SLP(C) No. 5918 of 2024), titled as Jogeswar Sahoo and Ors. v. The District Judge, Cuttack and Ors., decided on 4.4.2025, wherein taking note of its earlier judgments 2025:HHC:29130 - 2 - passed in State of Punjab and Ors. v. Rafiq Masih (White Washer) and Ors. (2015) 4 SCC 334, Hon’ble Apex Court has reiterated that recovery, if any, from retired official is impermissible, especially when amount sought to be recovered pertains to the period beyond five years. 2. Precisely, the facts of the case as emerge from the pleadings adduced on record by the respective parties are that petitioner herein was initially appointed as Clerk in respondent No.3- Corporation on 31.3.1995. Thereafter, he came to be promoted as Senior Assistant on 4.9.2011. While in service, petitioner was extended benefit of ACPS and at no point of time, objection was raised with regard to over payment, if any. Petitioner retired from service on 31.7.2023, as Superintendent (Grade-II), even at the time of retirement, no mention was made with regard to wrong fixation of pay of the petitioner, however, subsequently vide letter dated 19.10.2023, petitioner came to be informed that he was allowed the benefit of ACPS wrongly and as such, amount in that regard is required to be recovered. 3. Sum of Rs.2,22,147/- has been shown to be paid in excess and such amount has been now recovered from Death-cum- Retirement Gratuity vide order dated 6.11.2023. Though this Court having taken note of the facts of the case had passed order dated 6.11.2023, thereby staying the operation of impugned recovery orders 2025:HHC:29130 - 3 - dated 19.10.2023 (Annexure P-1), but yet respondents proceeded to recover sum of Rs.2,22,147/-, from sum of Rs.8,67,627/-payable to the petitioner on account of DCRG and Leave Encashment. In the afore background, petitioner has approached this Court in the instant proceedings, praying therein for following main reliefs: “a. That the impugned letter dated 19.10.2023, Annexure P-1 may be quashed and set-aside. The orders of effecting recoveries from the DCRG payable to the petitioner may be held illegal and set aside. b. That the office order dated 11.08.2023, Annexure P-2 may be held illegal and set aside and it may be ordered that the same shall have no effect on the fixation of pension payable to the petitioner. c. That the Respondent No.3 may be directed to release the DCRG amount of Rs, 867,327/- along with interest @ 9% per annum. d. That the Respondents may be directed to release the amount of leave encashment due to the petitioner along with interest @9% per annum.” 4. Though respondent No.3, in its reply, has admitted that benefit of ACPS was wrongly extended to the petitioner, but there is nothing to suggest that benefit of ACP was ever extended on the misrepresentation of the petitioner. If it is so, recovery now sought to be effected in terms of impugned order is wholly impermissible in view of law laid down by the Hon’ble Apex Court in Rafiq Masih (supra). 5. Though Mr. Mukul Sood, learned counsel appearing for respondent No.3 attempted to argue that no recovery is effected, rather amount is being adjusted on account of excess payment made to the 2025:HHC:29130 - 4 - petitioner, however this Court is not impressed with afore submission for the reason that amount, if any, paid in excess from the petitioner cannot be permitted to be recovered after an inordinate delay of 14 years that too after retirement of the petitioner. 6. Recently, Hon’ble Apex Court in Jogeswar Sahoo (supra) has further clarified that if the excess amount was not paid on account of fraud or mis-representation on the part of employee or if such excess payment was made by the employer by applying wrong principle for calculating the pay /allowance or on the basis of particular interpretation of rule/order, which is subsequently found to be erroneous, such excess payment of emoluments or allowance, is not recoverable. Most importantly, Hon’ble Apex Court has held that such relief against the recovery is not because of any right of the employee but in equity, exercising judicial discretion to provide relief to the employee from the hardship that will be caused if the recovery is ordered. 7. It is not in dispute in the case at hand that amount sought to be recovered was being paid w.e.f. year 2009. Now after 14 years, such amount is sought to be recovered, which is impermissible in view of the law taken note herein above. Relevant paras of the judgment passed in Jogeswar Sahoo (supra) read as under: “9. This Court has consistently taken the view that if the excess amount was not paid on account of any misrepresentation or fraud on the part of the employee or if such excess payment 2025:HHC:29130 - 5 - was made by the employer by applying a wrong principle for calculating the pay/allowance or on the basis of a particular interpretation of rule/order, which is subsequently found to be erroneous, such excess payments of emoluments or allowances are not recoverable. It is held that such relief against the recovery is not because of any right of the employee but in equity, exercising judicial discretion to provide relief to the employee from the hardship that will be caused if the recovery is ordered. 10. In Thomas Daniel (supra), this Court has held thus in paras 10, 11, 12 and 13: “10. In Sahib Ram v. State of Haryana1 this Court restrained recovery of payment which was given under the upgraded pay scale on account of wrong construction of relevant order by the authority concerned, without any misrepresentation on part of the employees. It was held thus: “5. Admittedly the appellant does not possess the required educational qualifications. Under the circumstances the appellant would not be entitled to the relaxation. The Principal erred in granting him the relaxation. Since the date of relaxation, the appellant had been paid his salary on the revised scale. However, it is not on account of any misrepresentation made by the appellant that the benefit of the higher pay scale was given to him but by wrong construction made by the Principal for which the appellant cannot be held to be at fault. Under the circumstances the amount paid till date may not be recovered from the appellant. The principle of equal pay for equal work would not apply to the scales prescribed by the University Grants Commission. The appeal is allowed partly without any order as to costs.” 2025:HHC:29130 - 6 - 11. In Col. B.J. Akkara (Retd.) v. Government of India2 this Court considered an identical question as under: “27. The last question to be considered is whether relief should be granted against the recovery of the excess payments made on account of the wrong interpretation/understanding of the circular dated 7- 6-1999. This Court has consistently granted relief against recovery of excess wrong payment of emoluments/allowances from an employee, if the following conditions are fulfilled (vide Sahib Ram v. State of Haryana [1995 Supp (1) SCC 18 : 1995 SCC (L&S) 248], Shyam Babu Verma v. Union of India [(1994) 2 SCC 521 : 1994 SCC (L&S) 683 : (1994) 27 ATC 121], Union of India v. M. Bhaskar [(1996) 4 SCC 416 : 1996 SCC (L&S) 967] and V. Gangaram v. Regional Jt. Director [(1997) 6 SCC 139 : 1997 SCC (L&S) 1652]): (a) The excess payment was not made on account of any misrepresentation or fraud on the part of the employee. (b) Such excess payment was made by the employer by applying a wrong principle for calculating the pay/allowance or on the basis of a particular interpretation of rule/order, which is subsequently found to be erroneous. 28. Such relief, restraining back recovery 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 2025:HHC:29130 - 7 - would spend it, genuinely believing that he is entitled to it. As any subsequent action to recover the excess payment 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. 29. On the same principle, pensioners can also seek a direction that wrong payments should not be recovered, as pensioners are in a more disadvantageous position when compared to in- service employees. Any attempt to recover excess wrong payment would cause undue hardship to them. The petitioners are not guilty of any misrepresentation or fraud in regard to the excess payment. NPA was added to minimum pay, for purposes of stepping up, due to a wrong understanding by the implementing departments. We are therefore of the view that the respondents shall not recover any excess payments made towards pension in pursuance of the circular dated 7-6-1999 till the issue of the clarificatory circular dated 11-9- 2001. Insofar as any excess payment made after the circular dated 11-9-2001, obviously the Union of India will be entitled to recover the excess as the validity of the said circular has been upheld and as pensioners have been put on notice in regard to the wrong calculations earlier made.” 2025:HHC:29130 - 8 - 12. In Syed Abdul Qadir v. State of Bihar3 excess payment was sought to be recovered which was made to the appellants-teachers on account of mistake and wrong interpretation of prevailing Bihar Nationalised Secondary School (Service Conditions) Rules, 1983. The appellants therein contended that even if it were to be held that the appellants were not entitled to the benefit of additional increment on promotion, the excess amount should not be recovered from them, it having been paid without any misrepresentation or fraud on their part. The Court held that the appellants cannot be held responsible in such a situation and recovery of the excess payment should not be ordered, especially when the employee has subsequently retired. The court observed that in general parlance, recovery is prohibited by courts where there exists no misrepresentation or fraud on the part of the employee and when the excess payment has been made by applying a wrong interpretation/understanding of a Rule or Order. It was held thus: “59. Undoubtedly, the excess amount that has been paid to the appellant 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 2025:HHC:29130 - 9 - behalf of the appellant teachers submitted that majority of the beneficiaries have either retired or are 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 appellant teachers, we are of the view that no recovery of the amount that has been paid in excess to the appellant teachers should be made.” 13. In State of Punjab v. Rafiq Masih (White Washer)4 wherein this court examined the validity of an order passed by the State to recover the monetary gains wrongly extended to the beneficiary employees in excess of their entitlements without any fault or misrepresentation at the behest of the recipient. This Court considered situations of hardship caused to an employee, if recovery is directed to reimburse the employer and disallowed the same, exempting the beneficiary employees from such recovery. It was held thus: “8. As between two parties, if a determination is rendered in favour of the party, which is the weaker of the two, without any serious detriment to the other (which is truly a welfare State), the issue resolved would be in consonance with the concept of justice, which is assured to the citizens of India, even in the Preamble of the Constitution of India. The right to recover being pursued by the employer, 11 will have to be compared, with the effect of the recovery on the employee concerned. If the effect of the recovery from the employee concerned would be, more unfair, more wrongful, more improper, and more unwarranted, than the corresponding right of the employer to recover the amount, then it 2025:HHC:29130 - 10 - would be iniquitous and arbitrary, to effect the recovery. In such a situation, the employee's right would outbalance, and therefore eclipse, the right of the employer to recover. xxxxxxxxx 18. It is not possible to postulate all situations of hardship which would govern employees on the issue of recovery, where payments have mistakenly been made by the employer, in excess of their entitlement. Be that as it may, based on the decisions referred to hereinabove, we may, as a ready reference, summarise the following few situations, wherein recoveries by the employers, would be impermissible in law: (i) Recovery from the employees belonging to Class III and Class IV service (or Group C and Group D service). (ii) Recovery from the retired employees, or the employees who are due to retire within one year, of the order of recovery. (iii) Recovery from the 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 2025:HHC:29130 - 11 - outweigh the equitable balance of the employer's right to recover.” 11. In the case at hand, the appellants were working on the post of Stenographers when the subject illegal payment was made to them. It is not reflected in the record that such payment was made to the appellants on account of any fraud or misrepresentation by them. It seems, when the financial benefit was extended to the appellants by the District Judge, Cuttack, the same was subsequently not approved by the High Court which resulted in the subsequent order of recovery. It is also not in dispute that the payment was made in the year 2017 whereas the recovery was directed in the year 2023. However, in the meanwhile, the appellants have retired in the year 2020. It is also an admitted position that the appellants were not afforded any opportunity of hearing before issuing the order of recovery. The appellants having superannuated on a ministerial post of Stenographer were admittedly not holding any gazetted post as such applying the principle enunciated by this Court in the above quoted judgment, the recovery is found unsustainable. 12. For the aforestated, we are of the considered view that the appeal deserves to be allowed. Accordingly, we allow the appeal and set aside the order of the High Court and in consequence the orders dated 12.09.2023 and 08.09.2023 by which the appellants were directed to deposit the excess drawn arrears are set aside. 8. Consequently, in view of the above, this Court finds merit in the present petition and accordingly, same is allowed and impugned order dated 19.10.2023 (Annexure P-1) is quashed and set-aside with direction to the respondents to release sum of Rs. 8,67,327/- to the petitioner on account of DCRG within three weeks. Needless to say, 2025:HHC:29130 - 12 - amount of DCRG, as detailed herein above, if not already released, shall be released with interest @ 6% per annum. 9. Present petition is disposed of alongwith pending applications, if any. August 28, 2025 (Sandeep Sharma), (manjit) Judge