P. Gopinath, J.
1. This Original Petition (KAT) is filed by the State of Kerala and its officers challenging Ext.P3 order of the Kerala Administrative Tribunal in O.A.No.(EKM) No.256/2016.
2. The brief facts are that the 1st respondent herein was working as a Lower Primary School Assistant (LPSA) in an aided school during the period from 24.8.1990 to 30.1.2001. From 31.1.2001, he was appointed as LPSA, in a Government school, following the advice of the Kerala Public Service Commission. Taking into account his service as an aided school teacher, he was granted the first higher grade w.e.f 31.1.2001 i.e. after he joined Government service and before the declaration of his probation in Government service. Similarly, he was granted the second higher grade (18 years) with effect from 1.1.2007 and the third higher grade with effect from 1.1.2003.
3. While matters stood thus, the 1st respondent was served with a copy of an audit report dated 1.4.2014 wherein, in respect of him, it was noted that the grant of the first higher grade with effect from 31.1.2001, prior to the declaration of probation in Government service was not in order. Consequently, the dates on which the second higher grade and the third higher grade were granted, were also wrong. Though the 1st respondent submitted a detailed objection, the same was overruled. Faced with recovery proceedings, the 1st respondent approached the Tribunal by filing the aforesaid O.A.(EKM)No.256/2016. On a consideration of the matter and following the law laid down in State of Punjab and other v. Rafiq Masih (White Washer); (2015) 4 SCC 334 and noticing that the decisions in Registrar of Co-operative Societies v. Israil Khan; 2009(4) KLT SN 51 [for the full text of the judgment please see (2010) 1 SCC 440] and Syed Abdul Qadir and others v. State of Bihar and others; (2009) 3 SCC 475 were applied and followed in the judgment of this Court in W.P.(c) 17325 of 2010 dated 4.8.2011, the Tribunal came to the conclusion that there can be no recovery of excess salary paid on account of the wrong fixation. While reaching this conclusion the Tribunal also followed the Division Bench judgment of this Court in Kasaragod District Co-operative Bank Ltd. and another v. Radha.K.A and another; 2016(1)KHC 260(DB)
4. It is to be noted that the question as to whether the 1st respondent was entitled to fixation from a date earlier than the date of declaration of probation was not considered by the Tribunal. That issue has not been argued before this Court also. We are therefore called upon to examine only one question viz. whether recovery could have been ordered or proceeded with against the 1st respondent before the Tribunal. The Tribunal has answered that question against the State and its officers. We are now called upon to pronounce upon the validity of the decision taken by the Tribunal.
5. The learned Government Pleader submits that the judgment of the Supreme Court in Rafiq Masih is no longer good law, in the light of the later judgment of the Supreme Court in High Court of Punjab and Haryana and others v. Jagdev Singh; (2016) 14 SCC 267. He would state that the principle in Rafiq Masih cannot be applied in situations where undertakings had been given by the employee concerned, undertaking, to refund any excess payment received. He would refer to Exts.P4, P5 and P6 which are options submitted by the 1st respondent for the grant of higher grade and points out the fact that in each of these options, the 1st respondent had undertaken to refund any excess payment if it was found later that he was not entitled to any payment or part of it. He would, therefore, state that the present case is one that is squarely covered in his favour in terms of the ratio of the judgment of the Supreme Court in Jagdev Singh, and draws our attention, in particular, to paragraphs 10 and 11 of that judgment.
6. Sri.Subash Chand, learned counsel appearing for the 1 st respondent would vehemently contend that the judgment of the Supreme Court in Jagdev Singh should not be treated as laying down an absolute principle which states that wherever the employee concerned had undertaken to refund excess pay, recovery could be effected at any point of time. He would state that the law laid down in Jagdev Singh should be confined to its own facts and should not be treated as applying to a case of this nature. He would urge that we should follow the judgment in Rafiq Masih and the judgment of a Division Bench of this Court in Kasaragod District Co-operative Bank.
7. In the light of the contentions raised before us, it is necessary to consider the law laid down in Jagdev Singh and to see whether this later judgment of the Supreme Court makes a complete departure from the law laid down in Rafiq Masih. In Jagdev Singh, pay revision benefits were extended to a judicial officer (the employee concerned) from time to time. During each of these occasions, as per the rules applicable to him, he had undertaken to refund any excess payment that may be made. Following the revision of pay scales upon implementation of the First National Judicial Pay Commission (‘Shetty Commission’) recommendations, the pay of the officer was again revised. The officer was compulsorily retired from service, on January 7, 2002. In February 2004 proceedings for recovery of payments made in excess were initiated against him. On his writ petition, the High Court came to the conclusion that any excess payment made to him prior to his retirement could not be recovered, there being no fraud or misrepresentation on his part. The judgment of the High Court was reversed by the Supreme Court, on a short ground which we will notice after setting out the law laid down in Rafiq Masih. In Rafiq Masih the Supreme Court had, in paragraph 18 of the judgment, observed as follows:-
“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 outweigh the equitable balance of the employer's right to recover.”
After noticing the categories of situations set out as (i) to (v) in paragraph 18 of Rafiq Masih, the Supreme Court in Jagdev Singh held in paragraph 11 as follows:-
“11. The principle enunciated in Proposition (ii) above cannot apply to a situation such as in the present case. In the present case, the officer to whom the payment was made in the first instance was clearly placed on notice that any payment found to have been made in excess would be required to be refunded. The officer furnished an undertaking while opting for the revised pay scale. He is bound by the undertaking.”
On a reading of both Rafiq Masih and Jagdev Singh, it is difficult for us to accept the contention of the learned Government Pleader that Jagdev Singh is a complete departure from the principles laid down in Rafiq Masih. From a reading of paragraphs 10 and 11 of Jagdev Singh, it appears to us that the Supreme Court had only clarified that in the case of recovery from retired employees or employees who are due to retire within one year of the order of recovery, there would be no bar in ordering recovery, if the employee concerned had executed an undertaking agreeing to refund any excess payment. We cannot read Jagdev Singh as having laid down the proposition that in every case where there is an undertaking as aforesaid, recovery can be ordered from the employee concerned whatever be the point of time that such payment was made. We cannot overlook the fact that there is not even a suggestion in Jagdev Singh that in the event of there being an undertaking to refund excess pay, none of the situations envisaged as items (i) to (v) of Rafiq Masih can be pressed into service.
8. In Ashwani Kumar Singh v. U.P. Public Service Commission; (2003) 11 SCC 584, it was held:-
10. Courts should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. Observations of courts are not to be read as Euclid's theorems nor as provisions of the statute. These observations must be read in the context in which they appear. Judgments of courts are not to be construed as statutes. To interpret words, phrases and provisions of a statute, it may become necessary for Judges to embark upon lengthy discussions, but the discussion is meant to explain and not to define. Judges interpret statutes, they do not interpret judgments. They interpret words of statutes; their words are not to be interpreted as statutes. In London Graving Dock Co. Ltd. v. Horton [1951 AC 737 : (1951) 2 All ER 1 (HL)] (AC at p. 761) Lord McDermott observed: (All ER p. 14 C-D)
“The matter cannot, of course, be settled merely by treating the ipsissima verba of Willes, J., as though they were part of an Act of Parliament and applying the rules of interpretation appropriate thereto. This is not to detract from the great weight to be given to the language actually used by that most distinguished Judge….”
11. In Home Office v. Dorset Yacht Co. [(1970) 2 All ER 294 : 1970 AC 1004 : (1970) 2 WLR 1140 (HL)] Lord Reid said, “Lord Atkin's speech … is not to be treated as if it were a statutory definition. It will require qualification in new circumstances” (All ER p. 297g-h). Megarry, J. in Shepherd Homes Ltd. v. Sandham (No. 2) [(1971) 1 WLR 1062 : (1971) 2 All ER 1267] observed: (All ER p. 1274d-e) “One must not, of course, construe even a reserved judgment of even Russell, L.J. as if it were an Act of Parliament;” In Herrington v. British Rlys. Board [(1972) 2 WLR 537 : (1972) 1 All ER 749 : 1972 AC 877 (HL)] Lord Morris said: (All ER p. 761c)
“There is always peril in treating the words of a speech or a judgment as though they were words in a legislative enactment, and it is to be remembered that judicial utterances are made in the setting of the facts of a particular case.”
12. Circumstantial flexibility, one additional or different fact may make a world of difference between conclusions in two cases. Disposal of cases by blindly placing reliance on a decision is not proper.
13. The following words of Hidayatullah, J. in the matter of applying precedents have become locus classicus: (Abdul Kayoom v. CIT [AIR 1962 SC 680], AIR p. 688, para 19)
“19. … Each case depends on its own facts and a close similarity between one case and another is not enough because even a single significant detail may alter the entire aspect. In deciding such cases, one should avoid the temptation to decide cases (as said by Cardozo) by matching the colour of one case against the colour of another. To decide, therefore, on which side of the line a case falls, the broad resemblance to another case is not at all decisive.”
“Precedent would be followed only so far as it marks the path of justice, but you must cut the dead wood and trim off the side branches, else you will find yourself lost in thickets and branches. My plea is to keep the path to justice clear of obstructions which could impede it.”
[Also see Haryana Financial Corpn. v. Jagdamba Oil Mills, (2002) 3 SCC 496]
In the light of principles laid down in Ashwani Kumar and Jagdamba Oil Mills, we cannot read Jagdev Singh to be a complete departure from Rafiq Masih as already indicated.
9. We also notice that the judgment in Syed Abdul Qadir & ors. v. State of Bihar & ors. was delivered by a Bench of three Hon’ble Judges and it was held:-
“58. The relief against recovery is granted by courts not because of any right in the employees, but in equity, exercising judicial discretion to relieve the employees from the hardship that will be caused if recovery is ordered. But, if in a given case, it is proved that the employee had knowledge that the payment received was in excess of what was due or wrongly paid, or in cases where the error is detected or corrected within a short time of wrong payment, the matter being in the realm of judicial discretion, courts may, on the facts and circumstances of any particular case, order for recovery of the amount paid in excess. See 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] , V. Gangaram v. Director [(1997) 6 SCC 139 : 1997 SCC (L&S) 1652] , Col. B.J. Akkara (Retd.) v. Govt. of India [(2006) 11 SCC 709 : (2007) 1 SCC (L&S) 529] , Purshottam Lal Das v. State of Bihar [(2006) 11 SCC 492 : (2007) 1 SCC (L&S) 508] , Punjab National Bank v. Manjeet Singh [(2006) 8 SCC 647 : (2007) 1 SCC (L&S) 16] and Bihar SEB v. Bijay Bhadur [(2000) 10 SCC 99 : 2000 SCC (L&S) 394] .”
10. Coming to the facts of the present case, the first higher grade was granted w.e.f 31.1.2001, the second higher grade was granted w.e.f 1.7.2007, and the third higher grade was granted w.e.f 1.1.2013. The audit objection was communicated to the 1st respondent sometime in April 2014, for the first time. It is clear that objections if any against the grant of the higher grade should have been communicated within a reasonable time after the grant. Here except in the case of the grant of the third higher grade no objection whatsoever seems to have been taken. It is not suggested to us that there was any misrepresentation on the part of the employee concerned which resulted in excess pay being granted to him. Therefore on an application of the principles in (i) Syed Abdul Qadir & ors. v. State of Bi
Please Login To View The Full Judgment!
har & ors. (ii) Rafiq Masih [Particularly paragraph 18 - category (iii)], and in the judgment of a Division Bench of this Court in Kasaragod District Co-operative Bank Ltd. and another v. Radha.K.A and another; we hold that recovery of any amount paid pursuant to the grant of the 1st and 2nd higher grades, on or with effect from 31.1.2001 & 1.7.2007 respectively would be inequitable. However, taking note of the fact that objections were raised and communicated to the 1st respondent regarding his ineligibility to have his entitlement for higher grade calculated with reference to a date prior to the date of declaration of probation, within a reasonable time after the sanction of the 3rd higher grade, we are of the view that the excess payment, if any, consequent on the sanction of the 3rd higher grade with effect from 1.1.2013 is liable to be recovered. 11. We, therefore, allow this O.P (KAT) in part and set aside Ext. P.3 order of the Kerala Administrative Tribunal. We hold that the 1st respondent is liable to refund any excess payment made to him on account of sanction of the 3rd higher grade with effect from a date earlier to his actual entitlement. We further direct that the excess amount shall be calculated and communicated to the 1st respondent herein within one month from the date of receipt of a copy of this Judgment. Recovery, as above, shall be effected in reasonable instalments. We make it clear that no amount shall be recovered on account of the amounts paid to the 1st respondent pursuant to the grant of the 1st and 2nd higher grades. The O.P(KAT) will stand disposed of on the aforesaid terms.