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Judgment
D. S. Mahra Member (J)
The applicants were initially engaged as daily-rated workers and were regularized in the year 1994 as Skilled Helpers. Thereafter, they made representations to the respondents for extending the benefit of SRO-149 of 1973, and the said benefit was accordingly granted to them by the competent authority.
Subsequently, the respondents withdrew the benefit of SRO-149 of 1973 vide order dated 08.06.2010. Aggrieved by the withdrawal of the said benefit, the applicants filed SWP No. 1959/2010 before the Hon’ble High Court of J&K, challenging the order dated 08.06.2010. The writ petition came up for hearing on 16.08.2010, and after hearing both parties, the Hon’ble High Court stayed the operation of the said order, thereby continuing the benefit of SRO-149 of 1973 in favour of the applicants by way of interim relief.
It is an admitted fact on record that after the interim relief was granted on 16.08.2010, the respondents did not take any further steps to either file an application for vacation of the said interim order or prefer any appeal before the Division Bench. As a result, the applicants continued to receive the benefits under SRO-149 of 1973 throughout their service till their retirement.
Now, after the superannuation of the applicants, the respondents have withheld the gratuity payable to them on the ground that the benefit of SRO-149 of 1973 was wrongly paid and that the excess amount is to be recovered. The applicants have filed the present OA seeking release of the withheld gratuity and challenging the proposed recovery.
Learned counsel for the applicants submitted that the benefit of SRO-149 of 1973 was extended by the competent authority and was being paid till 2010, and thereafter under the protection of an interim order of the Hon’ble High Court. He further submitted that since the applicants have already superannuated, and the payments were received without any misrepresentation or fraud, no recovery can now be effected, particularly by withholding their gratuity.
On the other hand, learned counsel for the respondents submitted that the benefit was withdrawn by the department as it was granted contrary to rules. Therefore, the amounts received under such benefit are liable to be recovered, and the respondents have accordingly withheld the gratuity payable to the applicants to adjust the excess payment.
Heard learned counsel for the parties and perused the record.
It is an admitted fact that the applicants were extended the benefit of SRO-149 of 1973 by the competent authority and such benefit continued uninterruptedly from the year of their regularization in 1994 till the issuance of the withdrawal order dated 08.06.2010. Upon challenge, the Hon’ble High Court, by interim order dated 16.08.2010, stayed the operation of the withdrawal order. Consequently, the applicants continued to receive the said benefit under the protection of the said judicial order.
It is also not in dispute that the respondents neither sought vacation of the said interim order nor filed any appeal before the higher forum. The respondents, therefore, allowed the interim relief to continue for nearly 14 years and paid the said benefits without any demur till the retirement of the applicants.
10.In these circumstances, the attempt to recover the amounts now—after the superannuation of the applicants—by withholding their gratuity is not only unjust but also impermissible in law. It is well settled that recovery of excess payment made due to administrative error, without any misrepresentation or fraud on the part of the employee, is impermissible after retirement.
11.The Hon'ble Supreme Court in the case of the State of Punjab & Ors. vs. Rafiq Masih & Ors. [(2015) 4 SCC 334] have examined the validity of the order passed by the State to recover the monetary benefit wrongly extended to the beneficiary employees in excess of their entitlement without any fault or representation at the behest of the recipients. The Hon'ble Supreme Court considered the situation of hardship caused to the employees if recovery is directed to be made. The Hon'ble Supreme Court disallowed the same and exempted the beneficiary employees from such recovery. The Hon'ble Supreme Court also summarized the situation whereby recoveries from employees would be impermissible in law:
"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. (1) 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 hard or arbitrary to such an extent, as would far outweigh the equitable balance of the employer's right to recover."
Similar view has also been taken by the Hon'ble Supreme Court in a latest case i.e., Thomas Daniel vs.State of Kerala & Ors. [2022 Live Law (SC) 438] and observed that relief against recovery has been granted not because of any right of the employees but in equity, exercising judicial discretion to provide relief to the employees from the hardship that will be caused if the recovery is ordered.
13.In view of the above settled legal position, and the fact that the applicants received the said benefits under the protection of an interim order, without any misrepresentation or fraud, the respondents are not entitled to recover the said amount or withhold gratuity on that ground.
Accordingly, the respondents are directed to release the withheld gratuity and other retiral benefits to the applicants within a period of six weeks from the date of receipt of a certified copy of this order. The respondents are further directed not to initiate any recovery from the applicants in respect of the amount paid to them under SRO-149 of 1973.
15.With these directions, the OA is allowed. No order as to costs.