LexSTATE OF PUNJAB AND OTHERS ETC. versus RAFIQ MASIH (WHITE WASHER) ETC.
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[2014] 13 S.C.R. 1343 STATE OF PUNJAB AND OTHERS ETC. A V. RAFIQ MASIH (WHITE WASHER) ETC. (Civil Appeal No. 11527 of 2014) DECEMBER 18, 2014 (JAGDISH SINGH KHEHAR AND ARUN MISHRA, JJ.) B Service Law- Recovery of monetary benefits- Wrongly extended to the employees - Due to unintentional mistake committed by the employer and not on account of any C misrepresentation or fraud committed by the employees - Propriety of the recovery - Held: In view of the doctrine of equality enshrined u!Arts. 14 to 18 and 38, 39, 39A, 43 and 46 of the Constitution, equity and good conscience has to be basis of all governmental actions, in the matter of D livelihood of the people - Recovery of monetary benefit given in excess of entitlement to the employee would be permissible in law, so long it is equitous and does not have harsh and arbitrary effect on the employee - Such recovery would be impermissible in cases of Class Ill and Class IV E employees; retired employees or due to retire within one year; where the excess payment was made for a period in excess of five years; where employee has wrongfully been required to discharge duty of a higher post and has been paid accordingly; and in any other case where the court finds that F recovery would be iniquitous or harsh or arbitrary to such an extent to outweigh the equitable balance of employer's right to recover- In the present case, recovery was impermissible - Constitution oflndia, 1950-Arts. 14 to 18, 38, 39, 39A, 43 and 46 - Equity. G Disposing of the appeals, the Court HELD: 1. The provisions under Articles 14 to 18, contained in Part Ill of the Constitution and Articles 38, 39, 39A, 43 and 46 contained in Part IV of the Constitution, H 1343 1344 SUPREME COURT REPORTS [2014] 13 S.C.R. A contain a mandate to the State requiring it to assure a social order providing justice - social, economic and political, by inter alia minimizing monetary inequalities, and by securing the right to adequate means of livelihood, and by providing for adequate wages· so as B to ensure, an appropriate standard of life, and by promoting economic interests of the weaker sections. In view ~fthe afore-stated constitutional mandate, equity and good conscience, in the matter of livelihood of the people of the country, has to be the basis of all c governmental actions. [Paras 9 and 10][1352-D-H; 1353-A] 2. Orders passed by the employer seeking recovery of monetary benefits wr~ngly extended to employees, can only be interfered with, in cases where such recovery D would result in a hardship of a nature, which would far outweigh, the equitable balance of the employer's right to recover. i.e. it would be iniquitous to recover the payment made. [Para 7][1351-C-E] E 3. An action of the State, ordering a recovery from an employee, would be in order, so long as it is not rendered iniquitous to the extent, that the action of recovery would be more unfair, more wrongful, more improper, and more unwarranted, than the F corresponding right of the employer, to recover the amount. Or in other words, till such time as the recovery would have a harsh and arbitrary effect on the employee, it would be permissible in law. [Para 10][1353-A-B] 4. Such recovery from employees belonging to the G lower rungs (i.e., Class-Ill and Class-IV - sometimes denoted as Group 'C' and Group 'D') of service, should not be l?Ubjected to the ordeal of any recovery, even though they were beneficiaries of receiving higher emoluments, than were due to them. Such recovery H STATE OF PUNJAB AND OTHERS ETC. v. RAFIQ MASIH 1345 would be iniquitous and arbitrary and therefore would A also breach the mandate contained in Article 14 of the Constitution. [Para 11)[1357-B-D] 5. Recovery of excess payments, made from employees who have retired from service, or are close to their retirement, would entail extremely harsh 8 consequences outweighing the monetary gains by the employer. A retired employee or an employee about to retire, is a class apart from those who have sufficient service to their credit, before their retirement Thus, recovery would be iniquitous and arbitrary, if it is sought C to be made after the date of retirement, or soon before retirement. A period within one year from the date of superannuation, should be accepted as the period during which the recovery should be treated as iniquitous. Therefore, it would be justified to treat an D order of recover
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