CWP IN THE HIGH COURT OF PUNJAB & HARYANA AT 780 Vinod Bala State of Punjab CORAM: HON Present : AMAN CHAUDHARY, J. (ORAL) 1. was initially appointed on and granted the benefit towards additional increment by counting her previous service aforesaid scale was sought to be recovered, which the Division vide order dated on instructions from the petitioner, restricts his prayer to only ordered by relying on the judgment of the Hon’ble Supreme Court in vs. The District Judge, Cuttack and others decided on 04.04.2025, wherein it has been held that the recovery of excess emoluments or allowances, disbursed as a consequence of an CWP-15736-2004 IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH Versus f Punjab and Others CORAM: HON’BLE MR. JUSTICE AMAN CHAUDHARY Mr. Jugam Arora, Advocate, for the petitioner. Mr. Arun Gupta, DAG, Punjab. AMAN CHAUDHARY, J. (ORAL) Learned counsel submits that was initially appointed on ad hoc basis, was regularized w.e.f. 01.10.1980 and granted the benefit towards proficiency step up increment and one additional increment by counting her previous service aforesaid scale was sought to be recovered, which the Division vide order dated 07.10.2004 had stayed while admitting the petition. uctions from the petitioner, restricts his prayer to only ordered by relying on the policy/instructions dated 20.01.2017 judgment of the Hon’ble Supreme Court in vs. The District Judge, Cuttack and others decided on 04.04.2025, wherein it has been held that the recovery of excess emoluments or allowances, disbursed as a consequence of an -1- IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH CWP-15736-2004 (O & M) Date of decision: 24.04.2025 ....Petitioner ...Respondents BLE MR. JUSTICE AMAN CHAUDHARY AG, Punjab. Learned counsel submits that services of the petitioner, who basis, was regularized w.e.f. 01.10.1980 proficiency step up increment and one additional increment by counting her previous service. However, the aforesaid scale was sought to be recovered, which the Division Bench had stayed while admitting the petition. He, uctions from the petitioner, restricts his prayer to only recovery policy/instructions dated 20.01.2017 and the judgment of the Hon’ble Supreme Court in Jogeshwar Sahoo and others vs. The District Judge, Cuttack and others, SLP (C) No(s). 5918-2024, decided on 04.04.2025, wherein it has been held that the recovery of excess emoluments or allowances, disbursed as a consequence of an PARVEEN KUMAR 2025.04.24 16:32 I attest to the accuracy and integrity of this order/judgment. CWP erroneous computation of the same, ought not to be affected, such indulgence being granted as an equi alleviate the hardship that might otherwise be caused by such recovery, especially to those retired, the relevant paras whereof read thus: CWP-15736-2004 erroneous computation of the same, ought not to be affected, such indulgence being granted as an equitable relief, extended solely to alleviate the hardship that might otherwise be caused by such recovery, especially to those retired, the relevant paras whereof read thus: “7. The issue falling for our consideration is not about the legality of the retrospective promotion and the financial benefit granted to the appellants on 10.05.2017. The issue for consideration is whether recovery of the amount extended to the appellants while they were in service is justified after their retirement and that too opportunity of hearing. 8. The law in this regard has been settled by this Court in catena of judgments rendered time and again; Sahib Ram vs. State of Haryana, (1995) Supp (1) SCC 18, Shyam Babu Verma vs. Union of India, (1994) 2 SCC vs. M. Bhaskar, (1996) 4 SCC 416 and V. Gangaram vs. Regional Jt. Director, (1997) 6 SCC 139 and in a recent decision in the matter of Thomas Daniel vs. State of Kerala & Ors., (2022) SCC online SC 536 9. This Court has consistently excess amount was not paid on account of any misrepresentation or fraud on the part of the employee or if 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, 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 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 -2- erroneous computation of the same, ought not to be affected, such table relief, extended solely to alleviate the hardship that might otherwise be caused by such recovery, especially to those retired, the relevant paras whereof read thus:- “7. The issue falling for our consideration is not about the retrospective promotion and the financial benefit granted to the appellants on 10.05.2017. The issue for consideration is whether recovery of the amount extended to the appellants while they were in service is justified after their retirement and that too without affording any The law in this regard has been settled by this Court in catena of judgments rendered time and again; Sahib Ram vs. State of Haryana, (1995) Supp (1) SCC 18, Shyam Babu Verma vs. Union of India, (1994) 2 SCC 521, Union of India vs. M. Bhaskar, (1996) 4 SCC 416 and V. Gangaram vs. Regional Jt. Director, (1997) 6 SCC 139 and in a recent decision in the matter of Thomas Daniel vs. State of Kerala & Ors., (2022) SCC online SC 536. 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 was made by the employer by applying a wrong principle for calculating the pay/allowance or on the s 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 but in equity, exercising judicial discretion to provide relief to the employee from the hardship that will be caused if the recovery is ordered. (supra), this Court has held thus in “10. In Sahib Ram v. State of Haryana, 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: 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 PARVEEN KUMAR 2025.04.24 16:32 I attest to the accuracy and integrity of this order/judgment. CWP CWP-15736-2004 relaxation. Since the date of relaxation, the appellan 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 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 partly without any order as to costs.” 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 excess payments made on account of the wrong interpretation/understanding of the circular dated 7 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 n 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, -3- 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.” Col. B.J. Akkara (Retd.) v. Government of 2 this Court considered an identical question as “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 onditions 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 CC (L&S) 967] and V. Gangaram v. Regional Jt. Director [(1997) 6 SCC 139 : 1997 SCC (a) The excess payment was not made on account of any misrepresentation or fraud on the part of the (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 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 d 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, PARVEEN KUMAR 2025.04.24 16:32 I attest to the accuracy and integrity of this order/judgment. CWP CWP-15736-2004 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 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 recov 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 obviously the Union of India will b 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.” 12. In Syed Abdul Qadir v. State of Bihar3 excess payment was sought to be re 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 -4- genuinely believing that he is entitled to it. As any subsequent action to recover the excess payment will due 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 ll 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 ty 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 1999 till the issue of the clarificatory 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.” 12. In Syed Abdul Qadir v. State of Bihar3 excess payment was sought to be recovered which was made 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 ppellants 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 d 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 PARVEEN KUMAR 2025.04.24 16:32 I attest to the accuracy and integrity of this order/judgment. CWP CWP-15736-2004 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 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 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 tea made.” 13. In State of Punjab v. Rafiq Masih 334 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 entitlem 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, will have to be compared, with the effect of the recovery on the employee concerned. If the effect of the recovery from -5- entation 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 artment 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 her, 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 appellant teachers submitted that majority of the beneficiaries have either red 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 State of Punjab v. Rafiq Masih, (2015) 4 SCC 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 “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 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, will have to be compared, with the effect of the recovery on the mployee concerned. If the effect of the recovery from PARVEEN KUMAR 2025.04.24 16:32 I attest to the accuracy and integrity of this order/judgment. CWP CWP-15736-2004 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 would be iniquitous and arbi 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 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, where 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 wi 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 th 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.” 11. In the case at hand, the appellants were working on the post of Stenographers when the subject il 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 m -6- 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 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. 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 (ii) Recovery from the retired employees, or the employees who are due to retire within one year, of the (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 uired to discharge duties of a higher post, and has been paid accordingly, even though he should have rightfully been required to work (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.” 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 PARVEEN KUMAR 2025.04.24 16:32 I attest to the accuracy and integrity of this order/judgment. CWP 2. that the petitioner received the amount by making any misrepresentation or concealment of facts. 3. to dispute the factual position and aforementioned judgment or cite any contrary law 4. insofar as recovery ordered is concerned. 24.04.2025 parveen kumar Whether speaking/reasoned : Yes / No Whether reportable CWP-15736-2004 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 Sten 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. In the case at hand, there is nothing in the written statement that the petitioner received the amount by making any misrepresentation or concealment of facts. Despite best efforts, learned State counsel has not been able to dispute the factual position and draw out any distinctive aspects in the aforementioned judgment or cite any contrary law In view of the afore, the present petition is partly allowed insofar as recovery ordered is concerned. Whether speaking/reasoned : Yes / No Whether reportable : Yes / No -7- 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 s 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 case at hand, there is nothing in the written statement that the petitioner received the amount by making any misrepresentation learned State counsel has not been able draw out any distinctive aspects in the aforementioned judgment or cite any contrary law. In view of the afore, the present petition is partly allowed (AMAN CHAUDHARY) JUDGE PARVEEN KUMAR 2025.04.24 16:32 I attest to the accuracy and integrity of this order/judgment.