High Court of KeralaDivision Bench2012-01-30Writ petition allowed

N. Sambasivan v. Kerala State, represented by Chief Secretary, Government of Kerala, The Secretary, Fisheries & Ports, Government of Kerala, The Director, Fisheries Department, Thiruvananthapuram, Matsyafed, Kuravankonam, Thiruvananthapuram

Case / Petition Number:W.P.(C).NO.6842/2004-M

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: A.M. Shaffique, J.
Thomas P. Joseph, J.
Judgment Date: 2012-01-30
Court Decision / Holding: Ext.P3 quashed. The court directs respondents 3 and 4 to pay all pensionary benefits to the petitioner with interest at 10% per annum from the date they became due, and to do so within one month from receipt of the judgment, without recovering any amounts from retirement benefits.
Final Disposition: Writ petition allowed

Parties to the Case

Appellants / Petitioners

N. Sambasivan

Respondents

Kerala State, represented by Chief Secretary, Government of Kerala, Secretariat, Thiruvananthapuram
The Secretary, Fisheries & Ports, Government of Kerala, Thiruvananthapuram
The Director, Fisheries Department, Thiruvananthapuram
The Managing Director, Matsyafed, Kuravankonam, Thiruvananthapuram

Legal Representation & Advocates

Counsels for Petitioners

• Sri. K. Balachandran (Mangalath)
• Sri. Rajesh Nair

Counsels for Respondents

• Smt. Lilly.K.T
• Sri. Mathew Zachariah, S.C
• Sri. George Poonthottam, S.C

Case Synopsis & Summary

This is a Kerala High Court writ petition (W.P.(C). No. 6842/2004) concerning retirement benefits and recovery of overpaid emoluments from the petitioner. The petitioner, N. Sambasivan, who retired on 31 December 2003, was served Ext. P1 demanding repayment of Rs. 2,18,816/- on the ground of overdrawn pay due to incorrect fixation of pay and allowances since 1985. Ext. P3, issued by the 4th respondent Matsyafed, directed recovery from the petitioner’s retirement benefits (D.C.R.G. and commutation), including gratuity and terminal surrender leave salary. The petitioner contends that the amounts received were what he was entitled to receive and that the employer’s error, not any fraud or misrepresentation by him, caused the overpayment; recovery from terminal benefits would violate Articles 14, 16, and 21 of the Constitution; gratuity cannot be attached. The respondents argue that the pay fixation violated government rules (G.O. MS 11/88/F&PD) and that recovery is permissible, though the petitioner’s lack of fraud is noted. The court quashes Ext. P3, and directs Matsyafed to pay all pensionary benefits with 10% interest from the due date, within one month, without any recovery. It relies on constitutional guarantees and statutory provisions (Gratuity Act, Sec. 4(6)) and supportive precedents to hold that recovery from retirement benefits is improper where there was no misrepresentation or fraud.

Provisions of Law Cited

Articles 14, 16 and 21 of the Constitution of IndiaSection 66 of the Kerala Cooperative Societies ActG.O.(MS) 11/88/F&PD dated 07/04/1988Section 4(6) of the Gratuity Act

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioner contends that recovery from D.C.R.G. and commutation is unjust, occurring due to the employer’s erroneous pay fixation rather than any fraud by the employee. He argues that, since there was no misrepresentation or deceit by him and the overpayment arose long after service, recovery from terminal benefits violates Articles 14, 16 and 21. He asserts gratuity cannot be attached, and relies on case law to contend that recovery after a long time for what he was legally entitled to receive is impermissible; Ext.P3 should be quashed and pensionary benefits should be paid with interest.

Contentions of Respondents

The respondents maintain the fixation included inadmissible elements (e.g., merging special compensatory allowances into the basic pay per G.O. 11/88/F&PD). They argue the overpayment resulted from an irregular fixation; though not a result of fraud, recovery from retirement benefits is argued as permissible. They rely on government rules and statutory provisions (including the Gratuity Act) to justify recovery, though they acknowledge that gratuity itself cannot be recovered under Sec. 4(6).

Cited Precedents (6)

Case Name	Citation	Treatment	Explanation
Paras Nath Singh v. State of Bihar	[(2009) 2 SCC (Supp) 198]	Positive	Quoted to support the proposition that absence of fraud or misrepresentation means recovery cannot be pursued after a long lapse if the employee merely received what he was entitled to.
Syed Abdul Qadir v. State of Bihar	[(2009) 3 SCC 475]	Positive	Cited for the same principle denying recovery where no misrepresentation by the employee.
Sahib Ram v. State of Haryana	[1995 Supp(1) SCC 18]	Positive	Used to reinforce the non-recoverability principle in absence of fraud or misrepresentation.
Aleyamma Varghese v. Secretary, General Education Department	[2007(3) KLT 700 (SC)]	Positive	Supports the view that recovery cannot be foisted where there is no fraud and employee received what was due.
Mathew K.C. v. Plantation Corporation of Kerala Ltd.	[2000-II LLJ 637]	Positive	Reiterates that long-past payments received without fraud should not be subject to recovery.
State Farms Corporation of India v. Mathai	[2008(2) KLT 112]	Positive	Supportive precedent on non-recovery from retirement benefits in similar contexts.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE** ## **MONDAY, THE 30TH DAY OF JANUARY 2012/10TH MAGHA 1933** ## **WPC.No. 6842 of 2004 (M) ------------------------------------** **PETITIONERS:** **---------------------** ## **N.SAMBASIVAN, ANANDA BHAVAN, SWADESHABHIMANI NAGAR, NEYYATTINKARA, TRIVANDRUM DISTRICT.** ## **BY ADVS.SRI.K.BALACHANDRAN (MANGALATH), SRI.RAJESH NAIR.** **RESPONDENTS:** **------------------------** **1. KERALA STATE, REPRESENTED BY CHIEF SECRETARY, GOVERNMENT OF KERALA, SECRETARIAT, THIRUVANANTHAPURAM.** **2. THE SECRETARY, FISHERIES & PORTS, GOVERNMENT OF KERALA, THIRUVANANTHAPURAM.** **3. THE DIRECTOR, FISHERIES DEPARTMENT, THIRUVANANTHAPURAM.** **4. THE MANAGING DIRECTOR, MASTYAFED, KURAVANKONAM, THIRUVANANTHAPURAM.** **R1 TO R3 BY GOVERNMENT PLEADER SMT. LILLY.K.T, R4 BY SRI.MATHEW ZACHARIAH,S.C, SRI.GEORGE POONTHOTTAM, S,C.** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 16/12/2011, THE COURT ON 30-01-2012 DELIVERED THE FOLLOWING:** ## **W.P.(C).NO.6842/2004-M:** ## **APPENDIX** ## **PETITIONER'S EXHIBITS:-** - **EXT.P.1: COPY OF THE ORDER DTD. 05/02/2004 BEARING NO.MFED/E1/3700/2003.** - **EXT.P.2: COPY OF THE REPLY DTD. 07/02/2004 BY THE PETITIONER TO THE R.4.** - **EXT.P.3: COPY OF THE PROCEEDINGS NO.MFED/E1/3700/03 DT. 13/02/2004 OF THE R.4.** - **EXT.P.4: COPY OF THE ORDER OF THE BOARD OF ADMINISTRATION OF MATSYAFED DTD. 04/12/1985.** - **EXT.P.5: COPY OF THE ORDER DTD. 03/10/87 BEARING NO. MATSYAFED -E15621/87 ISSUED BY MATSYAFED.** - **EXT.P.6: COPY OF THE ORDER DTD. 14/02/91 BEARING NO.9/91/F&PU OF FISHERIES & PORTS (A) DEPARTMENT.** - **EXT.P.7: COPY OF THE ORDER NO. MFED/E2/640/2002 DTD. 19/09/02 ISSUED BY THE MATSYAFED.** - **EXT.P.8: COPY OF THE PROCEEDINGS NO.MFED/E2/2843/97 DT. 16/12/2002 ISSUED BY THE MATSYAFED.** - **EXT.P.9: COPY OF THE ORDER NO.MFED/E/273/2001 DT. 05/01/02 ISSUED BY THE MATSYAFED.** - **EXT.P.10: COPY OF THE EXTRACT NO.MFED/E2/173/2002 DTD. 14/05/2002 ISSUED BY THE MATSYAFED.** - **EXT.P.11: COPY OF THE NOTICE NO.MATSYAFED/E1/273/2000 DT. 17/04/01 ISSUED BY THE MATSYAFED.** - **EXT.P.12: COPY OF THE LETTER DTD. 24/12/2003 ISSUED BY THE PETITIONER.** - **EXT.P.13: COPY OF THE ORDER NO. MFED/E1/3173/200 DT. 14/12/04 ISSUED BY THE MATSYAFED.** - **EXT.P.14: COPY OF THE LETTER DTD. 02/02/05 ISSUED BY THE MATSYAFED.** - **EXT.P.15: COPY OF THE LETTER DTD. 08/06/05 BEARING NO.MATSYAFED/E1/3700/-3 ISSUED BY THE MATSYAFED.** - **EXT.P.16 (A) & (B): COPY OF THE TAX DEDUCTION CERTIFICATES DT. 28/03/2002 AND 19/04/2002.** ## **W.P.(C).NO.6842/2004-M:** **EXT.P.17: COPY OF THE LETTER DT. 20/02/2003 ISSUED BY THE PETITIONER TO MATSYAFED, THIRUVANANTHAPURAM. EXT.P.18: COPY OF THE APPLICATION FOR LEAVE SALARY OF THE PETITIONER DTD. 20/12/2003.** ## **RESPONDENT'S EXHIBITS:-** **EXT.R4.A: COPY OF THE AUDIT/ENQUIRY REPORT DTD. 14/11/03. EXT.R4.B: COPY OF THE NOTICE DTD. 17/04/2001. EXT.R4.C: COPY OF THE NOTICE DTD. 16/04/2004. EXT.R4.D: COPY OF THE ORDER PASSED IN THE CASE OF MR. SREEKANTAN NAIR DTD. 07/04/1988. EXT.R4.E: COPY OF THE ORDER DTD. 28/11/1986. EXT.R4.F: COPY OF THE UNDERTAKING DTD. 25/01/2002. EXT.R4.G: COPY OF THE LETTER FROM GOVERNMENT DTD. 16/12/03 NO.13898/A1/03/ F& PD.** ## **//TRUE COPY//** ## **P.A. TO JUDGE** **Prv.** ## **A.M.SHAFFIQUE, J * * * * * * * * * * * * *** W.P.C.No.6842 of 2004 ---------------------------------------- Dated this the 30[th] day of January 2012 ## **J U D G M E N T** The petitioner retired from the service of the 4[th] respondent on 31/12/2003. When the documents were submitted for the retirement benefits, Ext.P1 was served on him stating that the petitioner has to remit an amount of Rs.2,18,816/- which was overdrawn due to wrong fixation of pay and allowances since 1985. Though he filed a reply as Ext.P2, Ext.P3 is issued by the 4[th] respondent directing recovery of the said amount from petitioner's D.C.R.G and commutation. The petitioner submits that what has been received by him as salary and perks was his eligibility and going by the documents produced, he had received only such amount which he was eligible to receive and apart from that the amounts have been paid by his employer without any demur and he was not responsible for the liability arising from drawing excess salary. In so far as he was not involved in any misrepresentation or fraud, merely for the reason that the employer had committed a mistake in calculation of his salary after such a long time, recovery of amounts from DCRG is in violation of Articles 14, 16 and 21 and that such a huge liability W.P.C.No.6842/04 2 has been imposed on him. Apart from that, it is contended that gratuity is not an amount which could be attached and no recovery can be effected from such gratuity. Hence the petitioner seeks quashing of Ext.P3 and a direction to the 4[th] respondent to provide the petitioner with D.C.R.G and other pensionary benefits. 2. In Ext.P3 it is stated that the Registrar of Co-operative Societies on inspection under Section 66 of the Kerala Cooperative Societies Act had pointed out that the irregular fixation of pay had led to higher monetary benefit in favour of the petitioner. It is further pointed out that the Executive Committee of Matsyafed which met on 29/01/2004 took a decision to recover the amount disbursed to the petitioner due to irregular fixation of pay from his retirement benefits which inter alia includes gratuity of Rs.1,73,008/- and terminal surrender leave salary of Rs.68,790/-. 3. In the counter affidavit filed by respondents 3 and 4, it is reiterated that the special compensatory allowance of Rs.245/taken for merging into the basic pay of the petitioner as on 01/02/1996 by fixing the pay of the petitioner is not at all admissible since it has been clearly stated in G.O.(MS) W.P.C.No.6842/04 3 11/88/F&PD dated 07/04/1988 that the existing emoluments for the purpose of fixation will be the total of basic pay in the existing scale as on 01/01/1987 and D.A including adhoc D.A admissible on such pay at the rates in force as on 01/05/1983 and special pay and other allowances will not be included in the existing emoluments. 4. Going by the counter affidavit, it could be seen that it is not on account of any deliberate misrepresentation or fraud on the part of the petitioner that the pay was fixed wrongly by respondents 3 and 4. The petitioner had been receiving the payments as salary throughout his career and finally after retirement if it is found that he has overdrawn his salary due to a mistake committed by the employer and it is sought to be recovered from his terminal benefits the said action is highly unreasonable and arbitrary. For that reason Ext.P3 is liable to be set aside. 5. The learned counsel for the petitioner also relied upon the judgments in **Paras Nath Singh v. State of Bihar [(2009) 2 SCC (Supp) 198]** , **Syed Abdul Qadir v. State of Bihar [(2009) 3 S.C.C 475], Sahib Ram v. State of Haryana [1995 Supp(1) S.C.C 18]** and **Aleyamma Varghese v. Secretary,** W.P.C.No.6842/04 4 ## **General Education Department[2007(3)K.L.T 700(SC)]** for the proposition that if there is no fraud or misrepresentation on the part of the employee in receiving the amount, than what he was actually entitled to, the same cannot be recovered after a long period of time. The position is reiterated by this Court in the judgments reported in **Mathew K.C. v. Plantation Corporation of Kerala Ltd. [2000-II-LLJ 637]** and **State Farms Corporation of India v. Mathai [2008(2)KLT 112]** . Needless to say that under Section 4(6) of the Gratuity Act, no recovery could be effected from the amount payable as gratuity. Under these circumstances, this writ petition is only to be allowed with the following directions: i) Ext.P3 is quashed. ii) There shall be a direction to respondents 3 and 4 to pay all pensionery benefits to the petitioner with interest @ 10% per annum from the date when it became due, without effecting any recovery within a period of one month from the date of receipt of a copy of this judgment. ## **(A.M.SHAFFIQUE, JUDGE)** jsr W.P.C.No.6842/04 5 W.P.C.No.6842/04 6 W.P.C.No.6842/04 7 ## **THOMAS.P.JOSEPH,J.** Crl.M.C.No. of 200 ORDER 19/01/2011