1 APHC010544542023 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3208] THURSDAY,THE TWENTY SIXTH DAY OF FEBRUARY TWO THOUSAND AND TWENTY SIX PRESENT THE HONOURABLE SRI JUSTICE D RAMESH WRIT PETITION NO: 28373/2023 Between: 1. NIMMAGADDA MRUTHYUNJAYUDU, S/O. N.VENKAT RAO (LATE), AGED ABOUT 60 YEARS, OCC. RETIRED MANAGER, NATIONAL INSURANCE COMPANY, REGIONAL OFFICE, 4TH FLOOR, R.R. TOWERS, NARASIMHA NAGAR, AKKAYAPALEM, VISAKHAPATNAM. ...PETITIONER AND 1. THE NATIONAL INSURANCE COMPANY LIMITED, REPRESENTED BY ITS DEPUTY GENERAL MANAGER REGIONAL OFFICE, 4TH FLOOR,R.R. TOWERS, NARASIMHA NAGAR, AKKAYAPALEM, VISAKHAPATNAM - 530 024. 2. THE NATIONAL INSURANCE COMPANY LIMITED, , HEAD OFFICE, REPRESENTED BY ITS CHAIRMAN-CUM- MANAGING DIRECTOR, CULKOTTA, WEST BENGAL STATE ...RESPONDENT(S): Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the 2 High Court may be pleased tomay be pleased to issue a writ, order or direction more in the nature of Mandamus declaring the impugned action of the respondents in recovering an amount of Rs.1,78,569/- from the Earned Leave Encashment amount after the retirement of the petitioner based on the impugned Notice dated 31-1-2023 issued by the 1st respondent without issuing any notice or affording any opportunity to the petitioner is as illegal, arbitrary, unjust, violative of Articles 14, 16 and 21 of the Constitution of India besides being opposed to all principles of natural justice and contrary to the law on the subject and consequently hold that the petitoner is entitled to get refund of the amount of Rs.1,78,569/- recovered from the petitioner with interest @ 18percent per annum with all consequential and attendant benefits and to pass such IA NO: 1 OF 2023 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased may be pleased to direct the respondents to refund the amount of Rs.1,78,569/- recovered from the petitioner by suspending the operation of the impugned Notice dated 31-1-2023 issued by the 1st respondent, pending disposal of the above writ petition and pass such o IA NO: 1 OF 2024 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased pleased to grant leave and permit the petitioner to file reply affidavit and pass Counsel for the Petitioner: 1. PAMARTHI KAMESWARA RAO Counsel for the Respondent(S): 1. V VEERABHADRA CHARY 3 The Court made the following: ORDER: The present Writ Petition is filed, under Article 226 of the Constitution of India, seeking the following relief: “to issue any writ, order or direction more particularly one in the nature of Writ of Mandamus or an appropriate writ or order declaring the action of the Respondents in recovering an amount of Rs.1,78,569/- from the Earned Leave Encashment amount after the retirement of the petitioner based on the impugned notice dated 31.01.2023 issued by the 1st respondent without issuing any notice or affording any opportunity to the petitioner as illegal, arbitrary, unjust and violative of Articles 14, 16 and 21 of the Constitution of India.” 2. Heard learned counsel for the petitioner and learned standing counsel for the respondent-Insurance companies. 3. The contention of the learned counsel for the petitioner that the impugned notice dated 31.01.2023 was issued straight away for recovering the amount of Rs.1,78,569/- without issuing any notice before passing the impugned orders. Though there are allegations that the petitioner has submitted that the TE Bills without approval from the competent authority and the respondents have not issued any notice to substantiate the correctness of the TE bills to the petitioner before coming to such conclusion. Further, the petitioner was retired from service on 28.02.2023. But, after retirement of the 4 petitioner, the respondents are not entitled to recover any amounts from the petitioner as per the observations made by the Hon’ble Apex Court in State of Punjab & others vs. Rafiq Masih (White Washer) 1 , wherein the Hon’ble Apex Court has given certain instructions at para 12, wherein recoveries cannot be made as follows: “12. 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 herein above, we may, as a ready reference, summarise the following few situations, wherein recoveries by the employers, would be impermissible in law: (i) Recovery from employees belonging to Class-III and Class- IV service (or Group 'C' and Group 'D' service). (ii) Recovery from retired employees, or employees who are due to retire within one year, of the order of recovery. (iii) Recovery from 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 outweigh the equitable balance of the employer's right to recover. 1 AIR 2015 SC 696 5 4. Hence, the impugned orders are not only contrary to the principles of natural justice, but also contrary to the observations made by the Hon’ble Apex Court in the above referred judgment, wherein the Hon’ble Apex Court held that the recoveries from the retired employees would be impermissible in law and cannot be made. 5. Reply to the said contentions, learned standing counsel appearing on behalf of the respondents based on the averments made in the counter affidavit has submitted that the petitioner has claimed bills for an extent of Rs.1,78,569/- and the same was pointed out by the Special Audit Committee appointed by the Head Office observed and found that various TE bills submitted/claimed by the petitioner were without approval from the competent authority, which is not permissible. Further as per Regulation 47 of General Insurance (Employees’) Pension Scheme, 1995, if any excess amounts are paid to the petitioner, the respondents authorities are entitled to recover the same from the petitioner. Accordingly, the respondents have recovered the same from the petitioner as the same has been paid to the petitioner contrary to the rules. 6 6. Considering the submissions made by both parties as contended by the petitioner though the respondents based on the Audit Report straight away concluded that the petitioner has obtained the said amounts without proper permission from the competent authority is contrary to law. On perusal of the impugned order, no notice has been issued to the petitioner to substantiate his defense. Apart from as observed by the Hon’ble Apex Court, where the respondents are not entitled to initiate any recovery proceedings after retirement of the petitioner. 7. In the instant case, the petitioner was retired on 28.02.2023. Hence, the impugned proceedings are passed just before the retirement of the petitioner, contrary to the observations made by the Hon’ble Apex Court. 8. Considering the said submissions and perusal of the impugned order, no such opportunity has been given to the petitioner before coming to such conclusion or passing the recovery proceedings. Hence, this Court is of the opinion that the respondents have not followed the principles of natural justice or not having given any opportunity to the petitioner to substantiate his claim. Accordingly, recovery is contrary to the observations made 7 by the Hon’ble Apex Court in Rafiq Masih (supra). Accordingly, the same is liable to set aside. 9. Accordingly, the writ petition is allowed setting aside the impugned notice dated 31.01.2023. Consequently the respondents are directed to release and pay the recovered amount to the petitioner within a period of two months from the date of receipt of copy of this order. No order as to costs. As a sequel, miscellaneous petitions pending, if any, shall stand closed. _______________________ JUSTICE D.RAMESH Date:26.02.2026 GK 8 THE HONOURABLE SRI JUSTICE D.RAMESH 25 WRIT PETITION NO:28373 of 2023 Dated:26.02.2026 Gk