High Court of KeralaSingle Judge2021-07-07Writ petitions allowed; recovery of excess remu...

Saidutty.C.V. v State of Kerala & Others; Narayanankutty C.M. 'Sree Nilayam' v State of Kerala & Others

Case / Petition Number:WP(C) No. 5620 of 2014; WP(C) No. 6099 of 2014

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: Honourable Mr. Justice Amit Rawal
Judgment Date: 2021-07-07
Court Decision / Holding: Impugned recovery notices in both cases are quashed; writ petitions allowed.
Final Disposition: Writ petitions allowed; recovery of excess remuneration quashed.

Parties to the Case

Appellants / Petitioners

Saidutty C.V.
Narayanankutty C.M. ("Sree Nilayam")

Respondents

State of Kerala (Secretary, Co-operative Department)
Registrar of Co-operative Societies, Thiruvananthapuram
Joint Registrar of Co-operative Societies, Malappuram
Malappuram District Co-operative Bank Ltd. (General Manager)
Board of Directors, Malappuram District Co-operative Bank Ltd.

Legal Representation & Advocates

Counsels for Petitioners

• T. G. Rajendran (Advocate)

Counsels for Respondents

• Sri B Harish Kumar (Government Pleader)

Case Synopsis & Summary

Two writ petitions challenge recovery of additional remuneration paid to officers who discharged the duties of General Manager of the Malappuram District Co-operativ e Bank. In WP(C) No. 5620 of 2014, the Deputy General Manager assumed charge as General Manager from 01.09.2006 and performed all administrative, financial and statutory duties of the post. He was sanctioned a charge allowance of Rs. 2630 per month, which was discontinued with effect from 31.08.2009 after four years and the excess amount paid was sought to be recovered. In WP(C) No. 6099 of 2014, another officer held the additional charge of General Manager from 31.03.2004 to 31.05.2006 while serving as Deputy General Manager, receiving the same charge allowance until retirement, with recovery sought in 2013. The petitions challenge recovery in the absence of specific provisions in the Kerala Service Rules (KSR). The court relies on the Supreme Court’s State of Punjab v. Rafiq Masih to determine the legality of such recoveries. The respondent contends that Rule 53(C) of the KSR restricts additional charge to three months and that excess payments are recoverable; petitioners argue there is no statutory authorization for recovery and that equity bars recovery where the employee acted without fault and the payment was made for years. The court ultimately holds that recovery would be inequitable and quashes the notices, allowing the petitions.

Provisions of Law Cited

Kerala Service Rules (KSR) Rule 53(C)

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioners contend that recovery of excess remuneration would be impermissible in law given the lack of express authorization in the Kerala Service Rules, especially where the duty was performed under an ongoing assignment and the excess payment spanned years. They rely on the principles from State of Punjab v. Rafiq Masih to assert that recovery should be avoided if it would be inequitable, harsh, or contrary to the equitable balance between employer and employee, and when the employee bears no fault in the mispayment. They emphasize that Rule 53(C) limits only the duration of an additional charge, not post-retirement adjustments, and that the authority’s communications did not negate the employee’s legitimate service performance. They argue that quashing recovery respects fairness and avoids penalizing long-serving officers who operated under an ambiguous arrangement.

Contentions of Respondents

The respondents contend that Rule 53(C) of the Kerala Service Rules permits only up to three months for an additional charge, and payments beyond that period are recoverable. They argue that the excess payments were made beyond the authorized period and that recovery is legally permissible. They cite the ongoing statutory framework and the need to rectify erroneous disbursements in the public interest. They contend that the stay on operations during petition admission did not erode the legal entitlement to recover and that the court should dismiss the petitions, or at least recognize the Government’s right to recover sums disbursed as a result of the unapproved extension of charge.

Cited Precedents (1)

Case Name	Citation	Treatment	Explanation
State of Punjab v. Rafiq Masih	2015 (1) KLT 429	Positive	The Supreme Court decision is relied upon to guide the propriety of recoveries when payments are made without clear statutory authority and under circumstances that may be inequitable; the Kerala court adopts its reasoning to hold that such recoveries should not be pursued in the present context.

Diagnostic Tool

Beta

Does this judgment govern your specific facts?

Don't risk relying on a distinguishable precedent. Enter your facts or proposition below. We will test it against Saidutty.C.V. v State of Kerala & Others; Narayanankutty C.M. 'Sree Nilayam' v State of Kerala & Others and instantly map out authorities that support, challenge, or govern your position.

Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE AMIT RAWAL** **WEDNESDAY, THE 7[TH] DAY OF JULY 2021 / 16TH ASHADHA, 1943** ## **WP(C) NO. 5620 OF 2014** ## **PETITIONER:** SAIDUTTY.C.V. C.V.HOUE, ESWARAMANGALAM P.O., THAVANNUR, MALAPPURAM 679 573. BY ADV SRI.T.G.RAJENDRAN ## **RESPONDENTS:** 1 STATE OF KERALA REP. BY THE SECRETARY CO-OPERATIVE DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM - 695 001. 2 THE REGISTRAR OF CO-OPERATIVE SOCIETIES THIRUVANANTHAPURAM - 695 001. 3 THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES MALAPPURAM - 676 505. 4 MALAPPURAM DISTRICT CO-OPERATIVE BANK LTD. REP. BY ITS GENERAL MANAGER, P B NO.8, MALAPPURAM - 676 505. 5 THE BOARD OF DIRECTORS MALAPPURAM DISTRICT CO-OPERATIVE BANK LTD., REP; BY ITS PRESIDENT, P.B NO.8, MALAPPURAM - 676 505. GP SRI B HARISH KUMAR THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 07.07.2021, ALONG WITH WP(C).6099/2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: **WP(C)NOs.5620/2014 & 6099/2014** **2** ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE AMIT RAWAL WEDNESDAY, THE 7[TH] DAY OF JULY 2021 / 16TH ASHADHA, 1943** ## **WP(C) NO. 6099 OF 2014** ## **PETITIONER:** NARAYANANKUTTY C.M "SREE NILAYAM", MELATTOOR P.O., MALAPPURAM-679326. BY ADV SRI.T.G.RAJENDRAN ## **RESPONDENTS:** 1 STATE OF KERALA REP. BY THE SECRETARY, CO-OPERATIVE DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM-695001. 2 THE REGISTRAR OF CO-OPERATIVE SOCIETIES THIRUVANANTHAPURAM-695001. 3 THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES MALAPPURAM-676505. 4 MALAPPURAM DISTRICT CO-OPERATIVE BANK LTD. REP. BY ITS GENERAL MANAGER, P B NO.8, MALAPPURAM-676505. 5 THE BOARD OF DIRECTORS MALAPPURAM DISTRICT CO-OPERATIVE BANK LTD., REP. BY ITS PRESIDENT, P B NO. 8, MALAPPURAM-676505. GP SRI B HARISH KUMAR THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 07.07.2021, ALONG WITH WP(C).5620/2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: **WP(C)NOs.5620/2014 & 6099/2014** **3** ## **JUDGMENT** [WP(C) Nos.5620/2014, 6099/2014] The question of law which arises in these two writ petitions is whether the additional remuneration given to the petitioners for discharging the duties can be recovered in the absence of any provisions in the Kerala Service Rules (KSR). Answer to the aforementioned question in my view is covered by the judgment of Supreme Court in _**State of Punjab v. Rafiq Masih**_ [2015 (1) KLT 429]. 2. It would be expedient to extract few facts. In W.P. (C).No.5620/2014 the petitioner while working as Deputy General Manager in the 4[th] respondent – Malappuram District Co-operative Bank was given the additional charge of General Manager. After assuming the charge with effect from 01.09.2006 he had performed all the administrative, financial and statutory functions attached to the post of General Manager. He was sanctioned a charge allowance of RS.2630/- per month which was discontinued with effect **WP(C)NOs.5620/2014 & 6099/2014** **4** from 31.08.2009 as it should not have been given beyond three months. Petitioner had retired on 31.05.2010 while holding the charge of General Manager and vide Exts.P2 and P3 excess amount paid to the petitioner was sought to be recovered. In writ petition No.6099/2014 petitioner was appointed as Deputy General Manager on 31.03.2004 and while working so, he was given additional charge of General Manager. He was sanctioned a charge allowance of Rs.2630/- per month till his retirement on 31.05.2006 and additional amount given to him is sought to be recovered only in 2013. 3. Learned counsel for the petitioners submitted that the recovery was sought to be effected against the petitioners beyond a period of three years and there was no fault of the petitioners or any mistake on the employees in holding the additional charge of General Manager which continued for more than three months duration which has been prescribed in Rule 53(C) of KSR. In support of the **WP(C)NOs.5620/2014 & 6099/2014** **5** aforementioned contention the ratio in the judgment cited above has been referred to. 4. On the contrary learned Government Pleader submitted that Rule 53(C) of the KSR permits only holding of additional charge for a period of three months whereas additional charge continued for more than four years and therefore the additional payment beyond three months was recovered. Though this Court had at the time of admission of the writ petition stayed the operation of the impugned orders, but the amounts have been recovered and urges this court for dismissal of this writ petition. 5. I have heard the learned counsel for the parties and appraised the paper book. 6. In paragraph 12 of the judgment cited above it was held as under: 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, **WP(C)NOs.5620/2014 & 6099/2014** **6** 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. (SC) 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. The present case falls within the parameters laid down by the judgment. The impugned recovery cannot be effected as there was no fault of the petitioners who were granted additional charge which they continued to discharge till their retirement. There would have been force in the **WP(C)NOs.5620/2014 & 6099/2014** **7** argument of the learned Government Pleader had they been communicated to relieve from the additional charge and despite that did not do. Accordingly, the impugned recovery notices in both the cases are hereby quashed and these writ petitions are allowed. **Sd/-** **AMIT RAWAL JUDGE** nak **WP(C)NOs.5620/2014 & 6099/2014** **8** ## **APPENDIX OF WP(C) 6099/2014** PETITIONER ANNEXURE EXHIBIT P1 - A TRUE COPY OF THE APPOINTMENT ORDER DATED 31-3-04. EXHIBIT P1(A)TRUE COPY OF THE COMMUNICATION DATED 128-2010 ISSUED BY THE 4TH RESPONDENT. EXHIBIT P1(B)TRUE COPY OF THE LETTER SENT BY THE PETITIONER TO THE 4TH RESPONDENT DATED 16-9-2010. EXHIBIT P2TRUE COPY OF THE COMMUNICATION SENT BY THE 2ND RESPONDENT DATED 20-9-13. EXHIBIT P3TRUE COPY OF THE COMMUNICATION SENT BY THE 4TH RESPONDENT DATED 19-11-13. EXHIBIT P4TRUE COPY OF THE REPRESENTATION SENT BY THE PETITIONER TO THE 4TH RESPONDENT DATED 21-12-13. EXHIBIT P5TRUE COPY OF THE RELEVANT PORTION OF SERVICE REGULATION. **WP(C)NOs.5620/2014 & 6099/2014** **9** ## **APPENDIX OF WP(C) 5620/2014** PETITIONER ANNEXURE EXT.P1: A TRUE COPY OF THE APPOINTMENT ORDER DATED 31/5/06. EXT.P1(A): TRUE COPY OF THE LETTER SENT BY THE PETITIONER TO THE 4TH RESPONDENT DATED 24/9/12. EXT.P2: TRUE COPY OF THE COMMUNICATION SENT BY THE 2ND RESPONDENT DATED 20/9/13. EXT.P3: TRUE COPY OF THE COMMUNICATION SENT BY THE 4TH RESPONDENT DATED 19/11/13. EXT.P4: TRUE COPY OF THE REPRESENTTION SENT BY THE PETITIONER TO THE 4TH RESPONDENT DATED 21/12/13. EXT.P5: TRUE COPY OF THE RELEVANT PORTION OF SERVICE REGULATION.