Sunny Mathew v. Kumarakom Service Co-Operative Bank Ltd

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** **THE HONOURABLE MR. JUSTICE SHAJI P.CHALY** **THURSDAY, THE 29TH DAY OF JUNE 2017/8TH ASHADHA, 1939** **WP(C).No. 11387 of 2016 (W) ----------------------------** **PETITIONER :** **SUNNY MATHEW, AGED 57 YEARS, S/O.MATHEW VI ATTENDER(3RD HIGHER GRADE) KUMARAKOM SERVICE CO-OPERATIVE BANK LTD NO 2298, KUMARAKOM P O, KOTTAYAM DISTRICT, PIN-696563** **BY ADVS.SRI.M.V.THAMBAN SRI.R.REJI SMT.THARA THAMBAN SRI.B.BIPIN SRI.ARUN BOSE** ## **RESPONDENTS :** **-----------** **1. KUMARAKOM SERVICE CO-OPERATIVE BANK LTD NO.2298 KUMARAKOM P O, KOTTAYAM DISTRICT, PIN 686563, REPRESENTED BY ITS SECRETARY,** **2. SECRETARY, KUMARAKOM SERVICE CO-OPERATIVE BANK LTD NO.2298 KUMARAKOM P O, KOTTAYAM DISTRICT, PIN - 686563** **3. JOINT REGISTRAR (GENERAL)OF CO-OPERATIVE SOCIETIES, OFFICE OF THE JOINT REGISTRAR (GENERAL) OF CO-OPERATIVE SOCIETIES, KOTTAYAM PIN 686001** **WP(C).No. 11387 of 2016 (W)** **--------------------------** ## **4. ASSISTANT REGISTRAR** **(GENERAL)OF CO-OPERATIVE SOCIETIES, OFFICE OF THE JOINT REGISTRAR (GENERAL) OF CO-OPERATIVE SOCIETIES, KOTTAYAM PIN 686001** **R1 & R2 BY ADV. SMT.SARITHA THOMAS BY ADV. SRI.SAJEEVAN** **KURUKKUTTIYULLATHIL R3 & R4 BY SENIOR GOVERNMENT PLEADER SRI.P.M.MANOJ** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 29-06-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **bp** ## **WP(C).No. 11387 of 2016 (W)** **----------------------------** ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS** ## **-----------------------** **EXHIBITS 1: TRUE COPY OF THE ORDER NO CRP/5238/90/LDS DTD 27/6/1990 OF THE JOINT REGISTRAR OF CO-OPERATIVE SOCEITY, KOTTAYAM, ALONG WITH ITS TRUE ENGLISH TRANSLATION EXHIBITS 2: TRUE COPY OF THE LETTER NO 22/3/2015 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER A COPY OF WHICH ALONG WITH ITS TRUE ENGLISH TRANSLATION EXHIBITS 3: TRUE COPY OF THE OBJECTION DTD 30/3/2015, SUBMITTED BY THE PETITIONER TO THE 2ND RESPONDENT ALONG WITH TRUE ENGLISH TRANSLATION EXHIBITS 4: TRUE COPY OF THE OBJECTION DTD 31/3/2015 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT ALONG WITH TRUE ENGLISH TRANSLATION EXHIBITS 5: TRUE COPY OF THE OBJECTION DTD 28/5/2015 FILED BY THE PETITIONER ALONG WITH TRUE ENGLISH TRANSLATION EXHIBITS 6: TRUE COPY OF THE LETTER DTD 29/6/2015 , ISSUED BY THE 2ND RESPONDENT ALONG WITH ITS ENGLISH TRANSLATION EXHIBITS 7: TRUE COPY OF THE OBJECTION DTD 30/6/2015 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT ALONG WITH TRUE ENGLISH TRANSLATION EXHIBITS 8: TRUE COPY OF THE REPRESENTATION DTD 27/7/2015 FILED BY THE PETITIONER BEFORE THE REGISTRAR OF CO-OPERATIVE SOCIETIES AT THIRUVANANTHAPURAM, ALONG WITH ITS ENGLISH TRANSLATION** **WP(C).No. 11387 of 2016 (W) ---------------------------** |**EXHIBITS 9:**|**TRUE COPY OF THE LETTER NO CRP (1)**| |---|---| ||**7126/15 DTD 18/12/2015 ISSUED BY THE 3RD**| ||**RESPONDENT AND A COPY OF WHICH ALONG WITH**| ||**ENGLISH TRANSLATION**| |**EXHIBITS 10:**|**TRUE COPY OF THE ARGUMENT NOTE SUBMITTED**| ||**BEFORE THE 3RD RESPONDENT BY THE**| ||**PETITIONER ALONG WITH ITS ENGLISH**| ||**TRANSLATION**| |**EXHIBITS 11:**|**TRUE COPY OF THE ORDER NO CRP (1)**| ||**7126/15/K.DIS DTD 12/2/2016 ISSUED BY THE**| ||**3RD RESPONDENT ALONG WITH ITS ENGLISH**| ||**TRANSLATION**| |**RESPONDENT(S)'**|**EXHIBITS**<br>**:**| |**-----------------------**|| |**EXT.R1(a):**|**COPY OF THE APPLICATION DT 26/3/2015**| ||**BEARING BI,.2107/2015 SUBMITTED BY THE R1**| ||**BEFORE THE ASSISTANT REGISTRAR CO-**| ||**OPERATIVE SOCIETIES, KOTTAYAM.**| |**EXT.R1(b):**|**COPY OF THE DECISION NO.204 TAKEN BY THE**| ||**DIRECTOR BOARD OF THE R1 AS PER THE**| ||**RESOLUTION DT 16/3/2015.**| |**EXT.R1(c):**|**COPY OF THE ORDER OF THE GOVERNMENT OF**| ||**KERALA AS PER GO.(MS) NO.519/2008/CO-OP DT**| ||**13/8/2008.**| |**EXT.R1(d):**|**COPY OF THE ORDER BEARING NO.EM(2)**| ||**1857/2010 ISSUED ON 18/3/2010 BY THE**| ||**REGISTRAR OF CO-OPERATIVE SOCIETIES.**| |**EXT.R1(e):**|**COPY OF THE CONTRACT/UNDERTAKING EXECUTED**| ||**BY THE PETITIONER ON EACH OCCASION OF RE-**| ||**FIXATION OF THE PAYMENT.**| ||**//TRUE COPY//**| ||**P.S. TO JUDGE**| ## **bp** ## **SHAJI P. CHALY, J.** -------------------------------------------------- ## **W.P.(C) No.11387 of 2016 ----------------------------------------------Dated this the 29[th] day of June, 2017** ## **JUDGMENT** This writ petition is filed by the petitioner seeking to declare that recovery of amount received by the petitioner on the wrong fixation of pay and granting of higher grade after 25 years of service is illegal and arbitrary, and for other related reliefs. Material facts for the disposal of the writ petition are as follows: 2. Petitioner at the time of filing of this writ petition was working as Attender under the 1st respondent Co-operative Bank, in the last grade service. Petitioner joined the service of the Bank on 15.03.1979 as an Attender. The qualification for the post of Attender is Seventh Standard, and he continued as an Attender till his retirement on 31.03.2017. Petitioner was granted 10 years higher grade with effect from 15.12.1989 and was granted the second higher grade on completion of 20 years with effect from 15.12.2004, in the scale of pay of Rs.1205-1980, and the third higher grade on completion of 25 years was granted on 15.12.2004 in the pay scale of Rs.3555- 2 **W.P.(C) No.11387 of 2016** 6600 dated 21.03.2005. On completion of 30 years of service without any promotion, according to the petitioner, he is entitled to the 4th higher grade, and accordingly he made a request for sanction of the same. However, the 2nd respondent as per Ext.P2 letter dated 22.03.2015 informed the petitioner that the 10 years higher grade granted to the petitioner with effect from 15.12.1989 has only application with effect from 27.04.1991, and that he is entitled to salary in the scale of pay of Rs.380-645 instead of Rs.475-740. It is also informed that, in fixing the higher grade, salary was fixed at Rs.5205-11060 instead of Rs.4265-8940. It is further stated that, during the fixation of third higher grade on 15.12.2004, the pay ought to have been granted was only Rs.4370-9180. Accordingly, it was informed that the Director Board in its meeting held on 16.03.2015 decided to re-fix the salary of the petitioner and to assess the excess amount allegedly drawn by the petitioner. 3. Thereupon, petitioner has filed an objection dated 30.03.2015, evident from Ext.P3, stating that the higher grade was granted and his pay was fixed as per the orders of the officials on the basis of the Government Orders issued from time to time, and that he has no knowledge of any erroneous 3 **W.P.(C) No.11387 of 2016** fixation. It was also pleaded by the petitioner that he is left with only two years of service, and that any recovery from his salary at this juncture will cause irreparable loss and injury to him. 4. However, overlooking the pleadings made in Ext.P3 objection, respondents 1 and 2 recovered an amount of Rs.6,855/- from the salary of the petitioner for the month of March, 2015, which, according to the petitioner, was without any notice, and thereupon, petitioner has submitted Ext.P4 objection dated 31.03.2015. However, no action was taken in accordance with the request made in Ext.P4 objection. Thereafter, petitioner has filed various applications and representations, however, it did not achieve any result. But, as per Ext.P6, 2nd respondent informed the petitioner that the excess salary paid to the petitioner up to February, 2015 is found to be Rs.7,77,218/- and towards leave surrender is Rs.25,967/-, and that it was decided to be recovered from the salary of the petitioner, Dearness Arrears, salary arrears on account of pay revision and from Gratuity, and that a request is made before the 4th respondent accordingly. It is also stated therein that permission was granted by the 4th respondent to 4 **W.P.(C) No.11387 of 2016** recover the excess pay allegedly made. 5. Being aggrieved by Ext.P6, petitioner has filed Ext.P7 before the 2nd respondent, explaining his innocence in the matter. However, no action was taken and consequentially, petitioner has submitted Ext.P8 before the Registrar of Cooperative Societies, complaining the illegal act of recovery. The Registrar has forwarded Ext.P8 to the 3rd respondent, and the 3rd respondent as per Ext.P9, provided a hearing to the petitioner. Petitioner appeared and submitted argument notes, explaining the true facts and entire circumstances. However, as per Ext.P11, the 3rd respondent has dismissed the representation/appeal submitted by the petitioner. It is thus challenging Ext.P11, and seeking other consequential reliefs, this writ petition is filed. 6. Respondents 1 and 2 have filed a counter affidavit, refuting the allegations and claims and demands raised by the petitioner. Among other contentions, it is stated that the 1st respondent Bank is handling the money of common people and it is running in a loss. The mistaken fixation of salary of the petitioner at a higher rate does not confer him any absolute right to hold the amount collected mistakenly and in excess. It **W.P.(C) No.11387 of 2016** 5 is further submitted that, as per Sec.72 of the Indian Contract Act, 1872, petitioner is bound to repay the amount collected in excess from the 1st respondent. The decision of the apex court relied on by the petitioner in _**'State of Punjab and Others v. Rafiq Masih (White Washer)'**_ [2015 (4) SCC 334] did not consider the mandate contemplated under Sec.72 of the Indian Contract Act. That apart, it is stated that the terminology used in Sec.72 is clear in every respect, entitling the respondents 1 and 2 to recover the salary incorrectly paid. It is also submitted that the 1st respondent has got every right to set off/adjust the excess salary paid from the retiral benefits due to the petitioner. Other contentions are also raised, justifying the action of the said respondents. That apart, it is contended that, ever since 2002, the Bank is running in loss, and the total of the excess amount received by the petitioner would come to Rs.8,03,485/- excluding interest. If the petitioner is allowed to enjoy the benefit of unlawful enrichment, the loss of the society would be increased and the people who have invested in the Bank and the shareholders will be put to various difficulties and losses, and therefore, the said respondents seek dismissal of the writ petition. ## **W.P.(C) No.11387 of 2016** 6 7. Heard learned counsel for the petitioner and the learned Senior Government Pleader and perused the documents on record and the pleadings put forth by the respective parties. 8. The question to be considered is, whether respondents 1 and 2 are entitled to seek recovery of the amount from the petitioner paid in excess by granting higher grade at various stages. Apparently, from the tenor of contentions, it is clear that higher grade was granted to the petitioner, based on certain parameters. However, from the tenor of contentions raised by respondents 1 and 2, it cannot be countenanced that the petitioner has any manner of role in respondents 1 and 2 fixing the higher grades. There is no case for the respondents 1 and 2 that the higher grade was granted to the petitioner on the basis of any request made by the petitioner or on the basis of any compelling circumstances, at the behest of the petitioner. It is also evident that the first higher grade was fixed on 15.12.1989, second higher grade was fixed during 2000 and third higher grade on 15.12.2004, after 25 years of service. Therefore, there is considerable delay on the part of respondents 1 and 2 in rectifying the **W.P.(C) No.11387 of 2016** 7 defects, if any, consequent to the higher grades provided to the petitioner. If the same was identified on an earlier date and intimated to the petitioner, the same could have been recovered from the salary of the petitioner in reasonable installments. The action was initiated against the petitioner pursuant to Ext.P6 in the year 2015, i.e. about two years before his retirement, and it was at that juncture, the petitioner has approached this Court and secured suspension of Exts.P2 and P6 orders. Now the petitioner has retired from the service on 31.03.2017, and the DCRG is not released to the petitioner. 9. The thrust of the contention advanced by learned counsel for the petitioner is that, petitioner is a last grade servant, and there is no manner of contribution from his part to secure the higher grades, the salary was paid to the petitioner at various stages, consequent to the decision taken by the Board of management of the 1st respondent. Petitioner heavily relied on the judgment of the apex court in ' _**Rafiq Masih**_ ' ( _supra_ ) to canvass the proposition that, as found out by the apex court in the aforesaid judgment, no recovery can be effected from the petitioner being a last grade servant. I 8 **W.P.(C) No.11387 of 2016** find force in the said contention. After assimilating the fact situations therein, apex court has laid down certain parameters for recovery of amounts mistakenly paid. They are as follows: “ _(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.”_ 10. Therefore, going by the principles so laid down by the apex court, petitioner is entitled to get benefit of the same and no recovery can be effected. However, learned counsel appearing for respondents 1 and 2 relied on Sec.72 of the Indian Contract Act, 1872, which read thus: _“_ _**72. Liability of person to whom money is paid, or thing delivered, by mistake or under coercion.** --A person to whom money has been paid, or anything delivered, by mistake or under coercion,_ 9 **W.P.(C) No.11387 of 2016** _must repay or return it.”_ 11. Therefore, according to the counsel, any amount mistakenly paid is entitled to be recovered as of right, going by the substantive provision contained under Sec.72 of the Act referred to above. But, in my considered opinion, in ' _**Rafiq Masih**_ ' ( _supra_ ), the apex court has considered the question with respect to the stipulations provided under Sec.72 of the Contract Act, and after assimilating the entire fact situations alone the legal principles are culled out in order to provide remedy to the aggrieved person. Therefore, in my considered opinion, the argument advanced by learned counsel appearing for respondents 1 and 2 in that regard cannot be sustained under law. I also bear in mind the judgments of the apex court in ' _**Syed Abdul Qadir v. State of Bihar**_ ' [(2009) 3 SCC 475 : 2009 KHC 4219] and ' _**Col. B.J. Akkara (Retd.) v. Government of India**_ ' [(2006) 11 SCC 709 : 2006 KHC 1488] in this regard. 12. Therefore, viewed in that circumstances, petitioner being a last grade servant, is entitled to enjoy the benefit of the principles of law laid down thereunder. Therefore, I have no hesitation to hold that the recovery of amount proceeded **W.P.(C) No.11387 of 2016** 10 against the petitioner as per Exts.P2 and P6 by respondents 1 and 2 with the assistance of respondents 3 and 4 cannot be sustained under law. Consequentially, I quash Exts.P2 and P6 and Ext.P11 order passed by the 3rd respondent and declare that respondents 1 and 2 are not entitled to recover any amount paid to the petitioner on the basis of alleged mistaken higher grades, during the tenure of his service. 13. Therefore, there will be a direction to respondents 1 and 2 to pay any amount recovered from the petitioner, and release all service benefits to the petitioner detained by respondents 1 and 2 on account of the issue in question. The writ petition is allowed accordingly. Sd/- **SHAJI P. CHALY JUDGE** St/30.06.2017