Legalcops – Legal Blog – Business Registrations & Tax Compliances

Hi there,

Whether the state government has the power to order the recovery of excess amount paid along with interest wherein a wrongly issued circular has been withdrawn?

FACTS:

In this case, on 26.08.2008, an order was issued by the State to grant a higher pay scale to the Medical Officers, Dental Surgeons and Officers working in the Specialist Cadre in four tier pay-scales on completion of 6 years. Later, on 23.05.2009, a circular was issued to the effect that the period from the date of appointment shall be counted though the benefit shall be granted from the date of issue of the order by the State Government on 26.08.2008. it was found that the circular issued on 23.05.2009 was wrongly issued without the approval of the Finance Department and that the circular was issued by a non-competent authority. Therefore, on 30.05.2012, the circular issued on 23.05.2009 came to be withdrawn. However, the respective Medical Officers working as Specialists, Dental Specialists and the officers working in the specialist’s cadre – members of the appellant association were granted the actual benefit flowing from the circular dated 23.05.2009 till 30.05.2012, i.e., till the circular dated 23.05.2009 was withdrawn. As the benefits were wrongly paid under the circular dated 23.05.2009, which was subsequently withdrawn on 30.05.2012, the State Government ordered recovery of the excess amount paid along with the interest.

JUDICIAL STATUS OF THE CASE:

The communication dated 30.05.2012 withdrawing the circular dated 23.05.2009 and the recovery of the excess amount paid along with the interest were the subject matter of Writ Petition No. 6236 of 2014 preferred by the M.P. Medical Officers Association. Individual writ petitioners also filed separate writ petitions, however, the Writ Petition No.6236 of 2014 preferred by the Association was treated as the lead matter. By common judgment and order, the learned Single Judge allowed all the writ petitions and quashed the communication dated 30.05.2012 withdrawing the circular dated 23.05.2009. The learned Single Judge also quashed the orders of recovery of the excess amount paid along with the interest.

Feeling aggrieved and dissatisfied with the judgment and order passed by the learned Single Judge dated 20.12.2017 passed in Writ Petition No. 6236 of 2014, the State preferred Writ Appeal No. 1073 of 2018 before the Division Bench of the High Court. By the impugned judgment and order, the Division Bench of the High Court has allowed the aforesaid writ appeal and has quashed and set aside the judgment and order passed by the learned Single Judge quashing and setting aside the communication dated 30.05.2012 withdrawing the circular dated 23.05.2009 and also quashing the recovery of the excess amount paid along with the interest.

Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court of Madhya Pradesh, Jabalpur in Writ Appeal No. 1073 of 2018 by which the High Court has allowed the said writ appeal preferred by the State of Madhya Pradesh and others and has quashed and set aside the judgment and order passed by the learned Single Judge passed in Writ Petition No. 6236 pf 2014, the original writ petitioners – M.P. Medical Officers Association and other individual members of the Association have filed the present appeals before the Supreme Court.

ISSUE RAISED: The impugned judgment and order passed by the Division Bench of the High Court passed in Writ Appeal No. 1073 of 2018 is the subject matter of the present appeals.

 

DECISION:

The Supreme Court held that the Division Bench of the High Court is absolutely justified in quashing and setting aside the judgment and order passed by the learned Single Judge of the High Court quashing the communication dated 30.05.2012 withdrawing the circular dated 23.05.2009. However, at the same time, the Division Bench of the High Court has erred in quashing and setting aside the judgment and order passed by the learned Single Judge allowing the writ petitions and setting aside the recovery of excess amount paid for the period between 2009 to 2012, which was sought to be recovered with interest.

Further the SC observed that in the peculiar facts and circumstances of the case, the State was not justified in ordering recovery of the excess amount paid along with the interest. It is true that stricto sensu, the decision of this Court in the case of State of Punjab and others Vs. Rafiq Masih, (2015) 4 SCC 334 may not be applicable and therefore held that in view of the reasons stated above, all these Appeals Succeed in part. The impugned judgment and order passed by the Division Bench of the High Court upholding the recovery of the excess amount paid along with interest is hereby quashed and set aside.

As a result, there shall not be any recovery of the excess amount paid pursuant to the circular dated 23.05.2009 till the same was withdrawn on 30.05.2012. However, for all other purposes including the pay fixation and pension etc., the same shall be now worked out as per the order dated 26.08.2008, as if, the circular dated 23.05.2009 was never issued.

Link to the Judgment – https://main.sci.gov.in/supremecourt/2019/98/98_2019_8_1502_37630_Judgement_26-Aug-2022.pdf

Written by Priya Raj, (Academic Year 2018-2023) School of Law, Mody University of Science and Technology, Rajasthan

Leave a Comment

Your email address will not be published. Required fields are marked *