IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
CWP No.660 of 2018 a/w
CWP Nos. 1867 of 2018, 731 of 2019, 773 of 2019,774 of
2019, 868 of 2019, 2321 of 2019, 2406 of 2019, 3527 of
2019, 76 of 2020, 203 of 2020, 321 of 2020, 802 of 2020,
860 of 2020, COPC No.52 of 2020, 160 of 2020, 182 of
201, 186 of 2021, CWP No.2176 of 2023, CWP No.3834 of
2023.
Date of Decision: 28.03.2024
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1. CWP No.660 of 2018
Gopal Singh Kanwar & others ….Petitioners
Versus
State of Himachal Pradesh & others … Respondents
_____________________________________________________________
2. CWP No.1867 of 2018
Kedar Nath Sharma & others ….Petitioners
Versus
State of Himachal Pradesh & others … Respondents
3. CWP No.731 of 2019
Roshan Lal ….Petitioner
Versus
State of Himachal Pradesh & others … Respondents
4. CWP No.773 of 2019
Desh Raj Sharma ….Petitioner
Versus
State of Himachal Pradesh & others … Respondents
5. CWP No.774 of 2019
Rajinder Singh Thakur ….Petitioner
Versus
State of Himachal Pradesh & others … Respondents
2
6. CWP No.868 of 2019
Madan Kumar ….Petitioner
Versus
State of Himachal Pradesh & others … Respondents
7. CWP No.2321 of 2019
Rajinder Singh ….Petitioner
Versus
State of Himachal Pradesh & others … Respondents
8. CWP No.2406 of 2019
Mast Ram ….Petitioner
Versus
State of Himachal Pradesh & others … Respondents
9. CWP No.3527 of 2019
Puran Chand Sharma ….Petitioner
Versus
H.P. State Co-operative Bank & others … Respondents
10. CWP No.76 of 2020
Smt. Champa Sharma & others ….Petitioner
Versus
State of Himachal Pradesh & others … Respondents
11. CWP No.203 of 2020
Smt. Sunita Kashyap & Ors. ….Petitioners
Versus
State of Himachal Pradesh & others … Respondents
12. CWP No.321 of 2020
Shyam Singh Hetta & others ….Petitioners
Versus
State of Himachal Pradesh & others … Respondents
3
13. CWP No.802 of 2020
Mohan Singh & others ….Petitioners
Versus
State of Himachal Pradesh & others … Respondents
14. CWP No.860 of 2020
Garish Kumar Mehta & others ….Petitioners
Versus
State of Himachal Pradesh & others … Respondents
15. COPC No.52 of 2020
Islam Ali and another ….Petitioners
Versus
Dr. Pankaj Lalit … Respondent
16. COPC No.160 of 2020
Virender Khurana ….Petitioner
Versus
Dr. Pankaj Lalit … Respondent
17. COPC No.182 of 2021
Smt. Champa Sharma & others ….Petitioners
Versus
Akshay Sood & others … Respondents
18. COPC No.186 of 2021
Sunita Kashyap & others ….Petitioner
Versus
Akshay Sood & others … Respondents
19. CWP No.2176 of 2023
Harbans Lal Dubey & others ….Petitioners
Versus
State of Himachal Pradesh & others … Respondents
20. CWP No.3834 of 2023
Jagan Nath ….Petitioners
Versus
State of Himachal Pradesh & others … Respondents
4
Coram:
Hon’ble Mr. Justice Sandeep Sharma, Judge.
Whether approved for reporting? 1
For the Petitioner(s): M/s Lalit K. Sharma, Dushyant
Dadwal, Ramesh Chand Sharma,
Nitin Thakur, Mr. Banbhushan Singh
and Tek Chand Sharma, Advocates, for
the petitioner(s) in the repetitions.
For the Respondent(s):Mr. Rajan Kahol, Mr. Vishal Panwar
and Mr. B.C.Verma, Additional
Advocate Generals with Mr. Ravi
Chauhan, Deputy Advocate General, for
the respondent- State, in all the
petitions.
Mr. Manish Sharma, Mr. Sunil Mohan
Goel, Mr. J.S.Bagga, Mr. R.L.
Chaudhary, Mr. Kuldeep Singh and Mr.
Hirdya Ram, Advocates, for the private
respondents.
_______________________________________________________
Sandeep Sharma, Judge(oral):
Since common question of law and facts are
involved in the present petitions and similar relief has been
claimed in all the petitions i.e. quashment of order dated
12.12.2017, passed by Registrar Co-operative Societies on the
representation made by one Sh. Sanjay Mandyal in terms of
judgment passed by this Court in CWP No.2055 of 2017, titled
Sanjay Mandyal versus State of H.P. and another, decided
1
Whether the reporters of the local papers may be allowed to see the judgment?
5
on 13.09.2017, same were heard together and are being
disposed of vide this common judgment.
2. For having bird’s eye view, facts, which are/were
common in all the petitions, are that Grade-IV employees of the
respondent-H.P. State Co-operative Bank came to be granted
benefit of one special increment on account of their having
done graduation in terms of Rule 21 of the Himachal Pradesh
State Cooperative Bank Employees (Terms of Employment and
Working Conditions) Rule, 1971. Though, aforesaid benefit of
increment was given in the year 1996, but in the year, 2002
same was merged in the basic pay. Vide communication dated
27th June 2002 (Annexure P-4), aforesaid benefit of special
increment, which was ordered to be merged with the basic pay
was ordered to be treated as personal pay. Since petitioners
herein already stood granted benefit in terms of un-amended
provision, coupled with the fact that same stood merged in the
basic pay, no recovery proceedings were initiated against the
petitioners or other similar situate persons by the respondent-
Bank after carrying out amendment in the aforesaid rules vide
communication dated 27th June 2002, whereby admittedly
aforesaid benefit of one special increment was ordered to be
treated as personal pay.
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3. Respondent-bank after having realized that there
was no hand, if any, of the petitioners in grant of aforesaid
benefit, rather same was extended to them pursuant to the
policy decision taken by the bank, initiated no action for
recovery, but one person namely, Sanjay Mandyal, private
respondent No.4, approached this Court by way of CWP
No.2055 of 2017, alleging therein that there is a huge scam in
the bank, whereby undue benefit has been given to some
ineligible persons, as a result thereof, huge financial loss has
been caused to the public exchequer. Division Bench of this
Court vide judgment dated 13.09.201,7 though did not
comment upon the correctness of the allegations levelled in the
writ petition, but directed respondent No.2, Registrar, Co-
operative Societies to decide the representation filed by
aforesaid complainant. Pursuant to aforesaid direction issued
by Division Bench of this Court, respondent No.2, constituted
Inquiry Committee to look into correctness of the allegations
levelled by the complainant. Inquiry Committee furnished its
report to respondent No.2 on 4.05.2013 making therein
following observations:-
“(a) That the Bank granted special increments
to its employees in lieu of passing
graduation degree after appointment in
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Bank and allowed wrong stepping up of
pay to the incumbents out of cadre;
(b) That the Bank granted special
increment to its employee after their
appointment in the bank and treating it
as pay anomaly; and
(c) That the Bank granted special
increment to its employee for passing
graduation degree and merged the same
in the basic pay.”
4. After having received aforesaid report, respondent
No.2 forwarded the same to the Managing Director of the
respondent-Bank, but allegedly no action was taken upon the
same and as such, respondent No.2, proceeded to pass
impugned order dated 12.12.2017, thereby directing Managing
Director of the respondent-bank to take immediate required
action on the corrective measures suggested in the enquiry
report dated 19.06.2013 within three months from the receipt
of this order. After passing of aforesaid order dated 12.12.2017
by respondent No.2, respondent-bank straightway without
affording opportunity of being heard to the petitioners or
similar situate persons, issued order of recovery (Annexure P-
7 colly) dated 15.02.2018, annexed with CWP No.660 of 2018.
In the aforesaid background, petitioners have approached this
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Court in the instant proceedings, praying therein to set aside
aforesaid order of recovery as well as order of re-fixation, if
any, and order dated 12.12.2017 passed by respondent No.2,
pursuant to which, proceedings of recovery, came to be
initiated against the petitioners.
5. Pursuant to the notices issued in the instant
proceedings, respondents No.3 and 4 have filed reply, wherein
facts, as have been noticed hereinabove, have been not
disputed, rather stands admitted. Though, careful perusal of
the reply filed by the respondent-bank, if perused in its
entirety, clearly reveals that there was no fault, if any, of the
petitioners in grant of special increments, which subsequently
came to be merged with the basic pay, but yet it has been
stated that it is bound to take action pursuant to the order
dated 12.12.2017 passed by respondent No.2.
6. Since despite there being stay order granted against
the recovery, respondent No.3 attempted to recover the amount
from the petitioners, they approached this Court by way of
contempt petition, which are also being disposed of vide
common judgment.
7. In reply to the contempt petitions, respondent-bank
also stated that it had specifically pointed out difficulties to
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respondent No.2, which may come in the implementation of
the order passed by respondent No.2, but yet respondent No.2,
directed the bank to go ahead with the recovery. It also came to
be averred in the reply to the contempt petitions that though
pursuant to the orders passed by this Court, recovery
proceedings were stayed, but since respondent No2, directed it
to pass order of re-fixation of pay, it had no option, but to
proceed with the recovery proceedings.
8. Respondent No.4 i.e. complainant also filed reply,
wherein similar set of allegations were levelled on the basis of
which, inquiry was constituted and ultimately respondent No.2
passed order and as such, there appears to be no justification
to make reference of the same, especially when allegations
leveled in the same stand adjudicated by the competent
authority.
9. Though, at this stage, Mr. R.L.Chaudhary, learned
counsel representing the complainant, attempted to argue that
allegations levelled by the complainant has not been looked
into properly by the Inquiry Committee as well as respondent
No.2, but since no challenge has been laid to the order passed
by Registrar, Co-operative Societies by the complainant, he is
estopped from making submissions, if any, with regard to
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correctness of the findings returned by the Registrar Co-
operative Societies as well as Inquiry Committee.
10. Since, Registrar Co-operative Societies vide
Annexure P-2, dated 5.11.1996 had accorded approval for
grant of one graduate increment to Grade-IV employees
w.e.f.5.11.1996 and subsequently vide Annexure P-4, while
approving the amendment in the rules had observed that basic
pay shall be treated as personal pay, which is prospective in
nature, it is not understood, how he was legally competent to
pass impugned order Annexure P-8 dated 12.12.2017.
11. Having heard learned counsel for the parties and
perused the material available on record, this Court is
convinced and satisfied that decision to grant special
increment was solely of the respondent-bank and there was no
hand, if any, of the petitioners or similar situate persons. Since
respondent-bank itself decided to extend benefit of special
increment to the petitioners on account of their having passed
graduation and such benefit was not only allowed to be
enjoyed by the petitioners, rather same was also decided to be
merged with the basic pay , petitioners herein could not have
been penalized by initiating recovery proceedings. No doubt,
record reveals that aforesaid decision to merge special
11
increment with basic pay was subsequently withdrawn on
account of amendment, but at that stage, respondent-bank
nowhere initiated proceedings, if any, for recovery for the
reason that it was fully aware of the fact that decision to
extend such benefit was of the bank and there was no hand, if
any, of the petitioners and other similar situate persons.
12. Similarly, this Court finds from the record that
Inquiry Committee though in its report made observation that
bank erroneously granted special increment to its employee in
lieu of passing graduation degree after appointment in the
bank and allowed wrong stepping up of pay to the incumbents
out of the cadre, but nowhere stated something specific against
the petitioners. It nowhere came to be pointed out by the
inquiry committee that petitioners or other similar situate
persons had any kind of hand in making such decision, which
was admittedly taken by the Board of Directors.
13. Leaving everything aside, if the observations/
recommendations/ suggestions made by the Inquiry
Committee on the basis of which, respondent No.2 passed
impugned order dated 12.12.2017, are perused in its entirety,
it nowhere suggest that recommendation, if any, was ever
made to recover the amount from the employees or such of
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those employees, who were beneficiary of the decision taken by
the respondent-bank to grant one special increment in lieu of
graduation done by the petitioners and other similar situate
persons, if it is so, there was otherwise no occasion, if any, for
respondent No.2 to order recovery that too from the petitioners
and other similarly situate persons.
14. This Court further finds from the order dated
12.12.2017, issued by respondent No.2 that direction was
given to Managing Director to take corrective measures as
suggested in the inquiry report dated 19.6.2013 and no
specific direction ever came to be issued to the respondent-
bank to initiate recovery proceedings against the petitioners
and similarly situate persons. No doubt, in terms of aforesaid
directions issued by the respondent No.2 , respondent-bank
could have taken steps for re-fixation of the pay, but certainly
there was no occasion for it to initiate recovery proceedings,
especially when there was nothing to suggest that aforesaid
benefit was availed/ taken by the petitioners on some
misrepresentation.
15. Though, bare reading of impugned order passed by
respondent No.2, dated 12.12.2017, nowhere suggests that
direction, if any, was ever issued to initiate proceedings, but
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since some confusion has arisen on account of passing of order
with regard action initiated by the respondent against the
petitioners, coupled with the fact that no prejudice, if any,
shall be caused to either of the parties on account of
quashment of order, this Court finds no reason to let aforesaid
order sustain, rather sustainance, if any, of the same would
unnecessary complicate the things.
16. Leaving everything aside, action of the respondent-
bank, thereby initiating recovery proceedings against the
petitioners after in ordinate delay is not sustainable in the eye
of law on account of definite law laid down by Hon'ble Apex
Court in catena of cases, wherein recovery after inordinate
delay from Grade -IV employee has been held to be
impermissible.
17. Reliance in this regard is placed upon the
judgment passed by Hon'ble Apex Court in State of Punjab
and others vs. Rafiq Masih (White Washer) and other, AIR
2015 SC 696, which in turn came to be relied upon by Division
Bench of this Court in CWPOA No.3145 of 2019, titled as S.S.
Chaudhary vs. State of H.P. and others, decided on
24.03.2022. In the aforesaid judgment, following parameters
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came to be laid where recovery by the employer would be
permissible/impermissible from the employee:-
“35. In view of the aforesaid discussion, as held by
Hon’ble Supreme Court in Rafiq Masih’s case (supra), it is
not possible to postulate all situations of hardship, where
payments have mistakenly been made by the employer,
yet in the following situations, recovery by the employer
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.
(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 be far outweigh the
equitable balance of the employer’s right to recover.
(vi)
Recovery on the basis of undertaking from the
employees essentially has to be confined to
Class/Group-A and Class-II/Group-B, but even
then, the Court may be required to see whether the
recovery would be iniquitous, harsh or arbitrary to
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such an extent, as would far overweigh the
equitable balance of the employer’s right to recover.
(vii)
) Recovery from the employees belonging to Class-III
and Class-IV even on the basis of undertaking is
impermissible.
(viii)
The aforesaid categories of cases are by way of
illustration and it may not be possible to lay down
any precise, clearly defined, sufficiently
channelized and inflexible guidelines or rigid
formula and to give any exhaustive list of myriad
kinds of cases. Therefore, each of such cases would
be required to be decided on its own merit.”
18. Apart from above, issue with regard to recovery
from Class-III & IV employees after their retirement stands
duly settled by the Hon'ble Supreme Court in Thomas Daniel
Vs. State of Kerala & Others, 2022 AIR (SC) 2153, decided on
02.05.2022 and in Civil Appeal No. 5527 of 2022, Madhya
Pradesh Medical Officers Association vs. State of Madhya
Pradesh and others, decided on 26.08.2022.
19. Consequently in view of the detailed discussion
made hereinabove as well as law taken into consideration, this
Court finds merit in the present petitions and accordingly
same are allowed and impugned order dated 12.12.2017
passed by respondent No.2, in all the petitions, is quashed and
set-aside and amount, if any, recovered on account of the
recovery proceedings, shall be refunded to the petitioners
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alongwith upto date interest. Pending applications, if any, also
stands disposed of.
COPC No.52 of 2020, COPC No. 160 of 2020,
COPC No.182 of 2021 and COPC No. 186 of 2021
19. In view of the order passed in CWP No.660 of 2018
alongwith connected matters, no orders are required to be
passed in these contempt petitions and accordingly the same
are dismissed alongwith pending applications, if any.
(Sandeep Sharma),
Judge
March 28, 2024
(shankar)