'Exchequer Should Not Suffer' : Supreme Court Directs Officers To Reimburse Loss Caused By Their Illegal Decisions

The Supreme Court recently directed certain public servants to reimburse the loss caused to the public exchequer by their illegal decisions.  

A bench of Justice Hima Kohli and Justice Rajesh Bindal were considering a case where a government employee (Respondent No. 4 in the appeal before the Apex Court) was granted upgradation of pay scale, from the date of his joining. The Court found the same to be illegal. The Apex Court found that the authorities were hand in gloves with the employee for granting him a higher pay scale. Since the higher payment made was not a bonafide error, the Court directed the recovery of the said amount from the 4th Respondent and from the officers responsible for granting him undue benefit.

“Since during the interregnum, the respondent No. 4 had been unjustifiably paid salary in the higher pay scale, one option could be that whatever had been paid to him till date, be left as such and his pay could be directed to be re-fixed from a future date. However, having regard to the level of the post of the respondent No. 4 and the manner in which he was extended special treatment at every step and was granted higher pay scale, we do not propose to adopt that course as this is not a case of any bonafide error. It was a well-planned and deliberate infraction. We therefore direct recovery of the excess amount paid to the respondent No. 4, though in instalments and/or from the officer(s), who were directly involved in the decision-making process of granting undue benefit to the respondent No.4. Both should be made equally liable to reimburse the exchequer for the amount illegally disbursed to the respondent No.4. The exchequer should not be made to suffer on that account and either of two shall have to make good that loss of undue benefit granted to the respondent No. 4.” the Court said in its order. 

According to the facts of the case, the Appellants joined the Commission for Scientific and Technical Terminology (CSTT) as Research Assistants in terms of the Central Hindi Directorate (Research Assistant) Recruitment Rules, 1980. In 1999 Respondent No.4 also joined CSTT as a Research Assistant. In 2005 he joined as Ayurvedic Physician, in the Directorate of Indian Systems of Medicine & Homeopathy, Puducherry. In 2006 his payscale was upgraded by equating the post of Assistant Scientific Officer (Medicine) to that of a doctor. Even though the 4th Respondent was not practising as a doctor in CSTT, he was granted a higher pay-scale from the date of his joining.

The Appellants then sought for grant of the same pay-scale as respondent No.4, since they were governed by the same set of Rules and discharging the same duties. The Tribunal and High Court denied relief to the Appellants and they subsequently approached the Apex Court.

The Court found the higher pay granted to R4 to be illegal. 'If governed by the same set of Rules, a single post of the same cadre could not have been isolated and granted a higher pay scale by merely considering the qualifications prescribed for the post' the Court said.

The Court also held that the Appellants were not entitled to the higher pay scale granted to respondent No. 4.

“We do not find any justification to grant same scale to the appellants as was generously and wrongly granted to the respondent No. 4 by treating him equal to the Medical Officer working in the Ministry of Health and Family Welfare. As even that scale was wrongly granted to him, there was no justification for grant of higher pay scale to the respondent No. 4 vide order dated 13.12.2006, with effect from 18.01.1999, i.e., the date of his initial appointment. The same was certainly illegal and cannot withstand in judicial scrutiny.” the Court said.

Case Title: Dr. P.N. SHUKLA V. UNION OF INDIA, CIVIL APPEAL NO.7747 OF 2012

Citation: 2023 LiveLaw (SC) 1045

Click here to read/download judgment