REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 3351-3354 OF 2003

Syed Abdul Qadir & Ors. ….. Appellants

Vs.

State of Bihar & Ors. ….. Respondents

WITH

CIVIL APPEAL NO. 3355 of 2003

&

CIVIL APPEAL NO.3364 OF 2003

J U D G M E N T

B.N. AGRAWAL,J.

1.These appeals by special leave are directed against the common judgment of

Patna High Court whereby a Division Bench of that Court dismissed letters patent

appeals preferred by the appellants herein against that part of the judgment of the

learned Single Judge in which it was decided that Office Order dated 16.11.2000

issued by the Finance Department, Government of Bihar, providing that fixation

of pay scale on promotion of Assistant Teachers of the Government taken over

Schools [the Nationalised Schools] in the State of Bihar shall be governed by

Fundamental Rule 22(1)(a)(2) [FR.22(I)(a)(2)] instead of Fundamental Rule 22-C

[FR.22-C], was valid. By the same judgment, the Division Bench allowed letters

patent appeals preferred by the State of Bihar and set aside that part of judgment

of the learned Single Judge whereby it was decided that Office Order dated

16.11.2000 would apply prospectively and not retrospectively and that recovery of

the amount paid in excess in breach of FR.22(I)(a)(2) from the appellants was not

to be made. While setting aside the judgment of the learned Single Judge and

holding that, since Office Order dated 16.11.2000 only reiterated that the amended

provisions of FR.22-C would apply and not FR.22-C, the question of its

applicability with retrospective or prospective effect did not arise, the Division

Bench directed that the excess amount paid to the employees be recovered without

interest in at least 50 instalments provided such an employee had the tenure of 50

months or more so that such an employee did not suffer unnecessary brunt of a cut

in the salary.

2. While Civil Appeal Nos. 3351-54 and 3364 have been preferred by the

aggrieved Assistant Teachers of the Nationalised Schools, Civil Appeal No. 3355 has

been preferred by the Bihar Secondary Teachers Association.

3.We now proceed to the facts relevant for the disposal of these appeals. The

appellants herein are the Assistant Teachers of the Nationalised Schools in the State

of Bihar, administrative control of which lies with the Department of Human

Resource Development, Government of Bihar. Exercising powers under Section 9 of

the Bihar Non-Government Secondary School [Take Over of Management and

Control] Act, 1981, the State Government vide Notification No. 12/B 8-760/75-398

dated 9

th

June, 1983 framed Bihar Nationalised Secondary School [Service

Condition] Rules, 1983 [hereinafter referred to as `the 1983 Rules’] and under rule

3 of the 1983 Rules, the secondary school teachers of the Nationalised Schools were

categorised. The hierarchy of promotion of these teachers was from the post of

Assistant Teacher [Junior Grade] to the post of Assistant Teacher [Subordinate

Grade], then to the post Assistant Teachers [Selection Grade] and finally to the post

of Head Master, which was the highest promotional post. Rule 17 of the 1983 Rules

provided that the pay scale of the teachers of the Nationalised Secondary Schools

would be determined as per Bihar Service Code and Rules issued by the State

Government from time to time. At that point of time, the time scale of these

teachers was regulated under Rule 78 of the Bihar Service Code. In order to remove

anomaly in the pay scales of teachers of the Nationalised Schools in the State of

Bihar and in terms of Bipartite Agreement entered into between the State

Government on the one hand and Secondary School Teachers Association and other

Unions on the other, the Finance Department, Government of Bihar, vide its

Resolution dated 18

th

December, 1989 took a decision with regard to revision of pay

scales of teachers of the Nationalised Schools based on the recommendations of the

4

th

Pay Revision Committee appointed by the State Government, which

recommendations were made applicable to all the teachers who were in service on 1

st

January, 1986 and those who joined or were promoted thereafter. Clause 13 of the

said Resolution provided that revised pay scales indicated in Schedule II of the said

Resolution would be extended to the teachers of Nationalised Schools and the

provisions relating to such teachers in the Central Government regarding training,

eligibility for appointment and promotion and other service conditions would be

made applicable to them as far as possible. Sub-clause (ii) of Clause 13 provided

that teachers who were in receipt of promotion or time bound promotion into the

Junior Selection Grade and had completed 12 years of service in the basic grade

prior to 1.1.1986 shall have their pay fixed in the revised senior scale as indicated in

Schedule II of the Resolution. However, those teachers who got promotion or time

bound promotion into the junior selection grade but had not completed 12 years of

service in the basic grade on 1.1.1986, shall have their pay fixed in the revised scale

in the basic grade only on 1.1.1986 and they were to be extended the benefit of

promotion and fixation of pay in the senior scale with effect from the date they

completed 12 years of service. Sub-clause (iii) of Clause 13 laid down that those

teachers who received promotion into junior selection grade or first time bound

promotion after 1.1.1986 but before 1.3.1989 shall be given the benefit of promotion

for the purpose of fixation of their pay in the revised scale only w.e.f. the date they

have received promotion or from the date on which they complete 12 years of

service, whichever is later. Sub-clause (vii) of Clause 13 provided that the existing

procedure of fixation of pay on promotion will cease to be applicable to teachers in

the revised pay-scales w.e.f. 1.1.1986 and in their case the pay fixation on promotion

would be governed by FR.22-C and instructions issued by the Central Government

from time to time and not as per the existing procedure. It may be mentioned here

that Department of Personnel and Training, Government of India, vide its

Notification dated 30

th

August, 1989, published in the Gazette of India on 16

th

September, 1989, i.e., before Resolution dated 18

th

December, 1989 issued by the

Finance Department of Government of Bihar came into force, deleted FR.22-C and

in its place inserted FR.22(I)(a)(1) and FR.22(1)(a)(2).

4. On 20.2.1993 the Finance Department, Government of Bihar, issued

another Resolution whereby Clause 13(ii) of its earlier Resolution dated 18.12.1989

- which provided that the category of teachers mentioned in the said clause would be

extended the revised senior scale on completion of 12 years of service in the basic

grade and that their pay in the senior scale shall be fixed as per FR.22-C - was

amended to the effect that pay of these teachers, on completion of 12 years of

service in the basic grade shall be fixed as per Rule 78(ii) of the Bihar Service Code.

It may be mentioned that while under FR.22-C there was provision for grant of an

additional increment on promotion to the higher post carrying duties and

responsibilities of greater importance, there was no such provision under Rule 78(ii).

However, despite the amendment aforesaid, the Human Resources Department of

the Government of Bihar, vide Notification dated 24.6.1993, reiterated that pay

fixation of teachers shall be made as per FR.22-C. Upon objection by the Audit

Team of the Office of the Accountant General, Bihar, in regard to payment of

pension, etc. to the concerned teachers on the basis of their last pay scale which was

fixed as per FR.22-C and on being asked to provide information about the

amendment/deletion of FR.22-C, the Kendriya Vidalaya Sangathan informed the

Office of the Accountant General that pay fixation of teachers in senior/selection

scale was to be made under FR.22(1)(a)(2), and that notional increment was not

admissible. Some of the elementary school teachers, who were affected by the

Resolution dated 20.2.1993, filed a Writ Petition before the High Court of Patna,

being CWJC No. 2405 of 1997 challenging Resolution dated 20.2.1993. The learned

Single Judge vide its judgment dated 17.9.1997 disposed of the writ petition and

while holding that the Resolution dated 20.2.1993 would come into effect only

prospectively, directed that the said Resolution was not applicable in the cases of the

petitioners of that Writ Petition in the matter of fixation of pay on

promotion/conversion granted prior to 20.2.1993, forbidding the respondent-State

of Bihar from reviewing the fixation of pay of the petitioners made prior to the said

Resolution. Aggrieved, the State of Bihar challenged the judgment of the learned

Single Judge by way of letters patent appeal, which having been dismissed for

failure on the part of the State Government for taking required steps, a special leave

petition was preferred before this Court, which was also dismissed. After the

dismissal of the special leave petition by this Court, the State of Bihar filed letters

patent appeal challenging that very judgment of the learned Single Judge, against

which the special leave petition had been dismissed. A Division Bench of the High

Court vide its judgment dated 17

th

February, 2000 dismissed the letters patent

appeal on merits, which judgment of the Division Bench was not challenged by the

State of Bihar before this Court.

5.Meanwhile, after the dismissal of the special leave petition by this Court, the

Director, Secondary Education, Government of Bihar, vide his letter dated 8.1.1999

requested the Accountant General to inform him about any decision of the State

Government with regard to the applicability of amended provision regarding fixation

of pay on promotion to the higher scale. The Accountant General in turn wrote to

the Finance Department, Govt. of Bihar, in this regard.

6.On coming to know of the instances of pay on promotion being fixed in terms

of FR.22-C, the Finance Department, Government of Bihar, on 16.11.2000 issued

an Office Order to the Departments of Primary and Mass Education, Secondary

Education and Primary Education, stating that pay fixation in terms of FR.22-C was

irregular and illegal because the said rule had been substituted before the said date

and no higher responsibility and duties were attached to the promotion post.

Accordingly, it directed all the principals/headmasters of Nationalized Schools to re-

fix the pay of the teachers in terms of provisions of FR.22(I)(a)(2) and recover the

excess payment made from the date of initial fixation of pay under FR.22-C in one

instalment, authorizing the Drawing and Disbursing Officer concerned to recover the

excess amount in maximum 20 instalments, if requested.

7.Aggrieved by the said Office Order, the appellants herein and others

similarly situated, filed Writ Petitions before the High Court of Patna, inter alia,

for quashing Office Order dated 16.11.2000 and for issuing directions to the

respondents not to reduce their pay scale and to allow them to continue in the scale

which was fixed as per FR.22-C. A learned Single Judge of the High Court, while

holding that FR.22(1)(a)(1) and FR.22(1)(a)(2) would be applicable in fixation of

pay scale of teachers of the Nationalised Schools and that Office Order dated

16.11.2000 would apply prospectively and not retrospectively, quashed that part of

the Office Order whereby direction for recovery of amount paid in excess was given.

The State of Bihar as well as the appellants herein and others similarly affected laid

a challenge against the judgment of the learned Single Judge by way of letters patent

appeals before the High Court. While the State of Bihar challenged that part of the

judgment of the learned Single Judge whereby it was held that the Resolution dated

16.11.2000 would apply prospectively and not retrospectively and against the

direction for no recovery of amount paid in excess, the appellants herein and others

challenged that part of the judgment whereby it was held that FR.22(1)(a)(1) and

FR.22(1)(a)(2) would apply in fixation of pay of the teachers of the Nationalised

Schools. As stated above, a Division Bench of the High Court allowed the letters

patent appeals preferred by the State of Bihar and dismissed those preferred by the

appellants herein and others similarly situated, holding that the cases of the

appellants – teachers would be governed by FR.22(1)(a)(2), their fixation of pay

would be made according to the amended rule i.e, FR.22(I)(a)(2) and not according

to FR.22-C, directing the State Government to recover the amount paid in excess

in reasonable installments.

8.Pursuant to the aforesaid directions of the High Court, the Finance

Department, Government of Bihar, issued an Office Order dated 12.9.2002 stating

that payment of salary from the month of September, 2002 would be made only if

the drawing and disbursing authority certified that the pay scale of all the teachers

had been re-fixed and steps for realization of the amount paid in excess in

installments had been initiated.

9.Aggrieved by the judgment of the Division Bench, the appellants have filed

these appeals by special leave.

10.We now turn to the rival submissions of learned counsel appearing on behalf

of the parties. Shri P.S. Mishra, learned senior counsel, appearing on behalf of the

appellants, submitted that in terms of Clause 13(vii) of Resolution dated

18.12.1989 of the Finance Department, Government of Bihar, the pay fixation of the

appellants on promotion was rightly made in terms of the provision contained in

FR.22-C as the said rule provided for grant of additional increment at the time of

promotion to higher grade. Mr. Mishra further submitted that FR.22-C having been

incorporated by adoption in the Resolution dated 18.12.1989, deletion of the said

rule prior to its adoption in the Resolution or any amendment or substitution of

that rule would not automatically delete, amend or substitute the same and,

therefore, the benefit of additional increment on promotion was rightly extended to

the appellants. The next submission of the learned counsel is that since Office Order

dated 16.11.2000 provided for fixation of pay of the appellants – teachers in terms of

the amended provision i.e., FR.22(I)(a)(2), the said Order would apply prospectively

and not retrospectively. Alternatively, it is submitted that in view of the fact that

decision of the learned Single Judge in CWJC No. 2405 of 1997 holding that the

amendment of Clause 13(ii) of Resolution dated 18.12.1989 by Resolution dated

20.2.1993 in the case of assistant teachers of primary schools would apply

prospectively i.e., w.e.f. from 20.2.1993, had attained finality, the letters patent

appeal against which having been dismissed by the Division Bench of the High

Court and the State of Bihar having not challenged the said decision before this

Court, the question of making the Office Order effective from a date prior to

20.2.1993 does not arise. It has also been submitted that even if it were to be held

that the appellants were not entitled to the benefit of additional increment on

promotion, the excess amount that has been paid to the appellants cannot and

should not be recovered; it having been paid without any misrepresentation or fraud

on the part of the appellants herein.

11.Per contra, Shri Rakesh Dwivedi, learned senior counsel appearing on behalf

of the respondents, submitted that since FR.22-C, which was not even in existence

on the day of issuance of Resolution dated 18.12.1989 wherein reference of it was

made, the same having been substituted by FR.22(I)(a)(1) and FR.22(I)(a)(2), was

not adopted and was only referred to in the said Resolution, the cases of the

appellants would be governed by the amended provision and not FR.22-C.

Alternatively, it is submitted that even if it were to be held that cases of the

appellants would be governed by FR.22-C and not by the amended provisions, the

appellants [assistant teachers], on their promotion to the higher/selection grade,

would still not be entitled to the benefit of additional increment provided under

FR.22-C as, admittedly, on their promotion to the higher/selection grade, they were

not discharging any duties and responsibilities of greater importance. It is further

submitted that as the question whether FR.22-C or its amended provision would

apply in the case on hand was not the subject matter of the decision rendered in

CWJC No. 2405 of 1997, it having decided the cases of the assistant teachers

covered by Clause 13(ii) of the Resolution whereas in these appeals the cases of rest

of the teachers covered by Clause (vii) are to be decided, the said decision is not at

all relevant for deciding the issue at hand.

12.Before adverting to the respective submissions made by the learned counsel

appearing on behalf of the parties, it would be useful to refer to Clause 13 of

Resolution dated 18.12.1989, Rule 78 of the Bihar Service Code, FR.22-C, as it

existed prior to its substitution, and FR.22(I)(a)(1) and FR.22(I)(a)(2), which

replaced FR.22-C.

13.Clause 13 of Resolution dated 18.12.1989 deals with revision of pay scale of

assistant teachers of the Nationalised Schools and fixation of pay on their promotion,

relevant portion of which runs thus:-

“Clause 13. The State Government have decided that revised pay scale indicated in

Schedule II be extended to teachers in these schools and the provisions under the

Central Government regarding training, eligibility for appointment and promotion

and other service conditions be made applicable to them as far as possible. Thus, the

efficiency bars in their pay scales shall also continue. The following principles have

been laid down for fixation of pay in the revised scale. These provisions shall be

applicable to all teachers except those having matric [Untrained] or lower

qualification:-

(i)All those teachers who were in the basic grade on 1

st

January,

1986, shall have their revised pay fixed in the basic grade

indicated in Schedule II.

(ii)All those teachers who were in receipt of promotion or time

bound promotion into the Junior Selection Grade and had

completed 12 years of service in the basic grade prior to 1st

January, 1986 shall have their pay fixed in the revised senior

scale indicated in Schedule II. Those teachers who were in

receipt of promotion – time bound promotion into the junior

selection grade prior to 1st January, 1986 but had not

completed 12 years of service in the basic grade on that date

shall also have their pay fixed in the revised scale in the basic

grade only on the 1st day of January, 1986. Benefit of

promotion and fixation of pay in senior scale shall be given to

them with effect from the date they complete 12 years of service.

(iii)Those teachers who have received promotion into junior

selection grade or first time bound promotion after 1

st

January,

1986 but before 1

st

March, 1989 shall be given the benefit of

promotion for the purpose of fixation of their pay in the revised

scale only with effect from the date they have received

promotion, or date on which they complete 12 years of service

whichever is later.

(iv)Those teachers who have been promoted into senior selection

grade and have also completed 12 years of service or have

received second time bound promotion on completion of 25

years of service prior to 1

st

January, 1986 shall also have their

pay fixed in the revised senior scale. Promotion into the senior

selection grade or second time bound promotion after 1

st

January, 1986 shall be ignored for the purpose of fixation of

pay in the revised scale.

(v)Benefit of selection scale in the revised scale of pay shall be

extended to teachers in accordance with availability of post and

the procedure and conditions prescribed by the Central

Government for their teachers which would be deemed to have

been in force with effect from 1

st

January, 1986.

................................................................

(vi)…………………………………………………

(vii)The existing procedure of fixation of pay on promotion will

cease to be applicable to teachers in the revised pay scales with

effect from 1

st

January, 1986. In their case the pay fixation on

promotion shall be governed by rule 22-C of the Fundamental

Rules and instructions issued by the Central Government for

their teachers from time to time. The fixation of pay on

promotion referred to in sub-paragraphs (ii), (iii), (iv) & (v)

shall also be governed by those provisions.”

14.While sub-clauses (ii), (iii), (iv) and (v) of Clause 13 lay down the procedure

to be adopted for fixation of pay on promotion in respect of different classes of

teachers mentioned in these sub-clauses, sub-clause (vii) provides that the pay

fixation of teachers referred to in sub-clauses (ii), (iii), (iv) and (v) shall be governed

by FR.22-C and instructions issued by the Central Government from time to time.

15.Rule 78 of the Bihar Service Code, which governed the fixation of pay of the

appellants – teachers prior to 1.1.1986, reads as under:-

“Rule 78.- The initial substantive pay of a Government servant who is appointed

substantively to a post on a time-scale of pay is regulated as follows:-

(a)If he holds lien on a permanent post other than a tenure post, or

would hold a lien on such a post had his lien not been suspe-

nded:-

(i)When appointment to the new post involved the

assumption of duties or responsibilities of greater

importance [as interpreted for the purpose of rule 89]

than those attached to such permanent post, he will

draw as initial pay the stage of the time-scale next above

his substantive pay in respect of the old post.

(ii)When appointment to the new post does not involve such

assumption, he will draw as initial pay the stage of the

time-scale which is equal to his substantive pay in

respect of the old post, or, if there is no such stage the

stage next below that pay, plus personal pay equal to the

difference and in either case will continue to draw that

pay until such time as he would have received an

increment in the time-scale of the old post, or for period

after which an increment is earned in the time-scale of

new post, whichever is less. But if the minimum pay of

the time-scale of the new post is higher than his

substantive pay in respect of the old post, he will draw

that minimum as initial pay.”

16.A plain reading of sub-rule (i) of Rule 78 makes it clear that an incumbent,

on being appointed to the new post, involving the assumption of duties or

responsibilities of greater importance than those attached to such permanent post,

will draw as initial pay the stage of the time-scale next above his substantive pay in

respect of the old post, but in the event of appointment to the new post, not involving

such assumption, the fixation of pay will be done under sub-rule (ii) of Rule 78

according to which, he will draw as initial pay the stage of the time-scale which is

equal to his substantive pay in respect of the old post. or, if there is no such stage the

stage next below that pay, plus personal pay equal to the difference and in either case

will continue to draw that pay until such time as he would have received an

increment in the time-scale of the old post It may be mentioned here that under Rule

78(i) of the Bihar Service Code, there is no provision of granting of additional

increment while fixing the basic pay of the higher post, which appear to be the reason

for ignoring the said rule by the State Government and deciding to have the central

pattern vide FR.22-C and instructions issued by the Central Government from time

to time in the case of pay fixation on promotion vide Resolution dated 18.12.1989.

17.FR.22-C, which was substituted even prior to the issuance of Resolution

dated 18.12.1989, and was replaced by FR.22(I)(a)(1) and FR.22(I)(a)(2), read

thus:-

“F.R.22-C.- Notwithstanding anything contained in these Rules, where a

Government Servant holding a post in a substantive, temporary or officiating capacity

is promoted or appointed in a substantive, temporary or officiating capacity to

another post carrying duties and responsibilities of greater importance than those

attaching to the post held by him, his initial pay in the time-scale of the higher post

shall be fixed at the stage next above the pay notionally arrived at by increasing his

pay in respect of the lower post by one increment at the stage at which such pay has

accrued:

Provided that the provisions of this rule shall not apply where a government

servant holding a Class I post in a substantive, temporary or officiating capacity is

promoted or appointed in a substantive, temporary or officiating capacity to a higher

post which is also a Class I post.”

18.A reading of FR.22-C makes it clear that benefit of an additional increment

would be extended to a government servant in the event of his being promoted or

appointed to a substantive, temporary or officiating capacity to another post

carrying duties and responsibilities of greater importance than those attaching to

the post held by him. As aforesaid, FR.22-C was substituted even prior to the

issuance of Resolution dated 18.12.1989 and was replaced by FR.22(I)(a)(1) and

FR.22(I)(a)(2), relevant portions of which are quoted hereinbelow:-

“FR.22(I).- The initial pay of a government servant who is appointed to a post on a

time-scale of pay is regulated as follows:-

(a)(1).- Where a government servant holding a post, other than a tenure post, in a

substantive or temporary or officiating capacity is promoted or appointed in a

substantive, temporary or officiating capacity, as the case may be, subject to the

fulfillment of the eligibility conditions as prescribed in the relevant Recruitment

Rules, to another post carrying duties and responsibilities of greater importance than

those attaching to the post held by him, his initial pay in the time-scale of the higher

post shall be fixed at the stage next above the notional pay arrived at by increasing

his pay in respect of the lower post held by him regularly by an increment at the stage

at which such pay has accrued or rupees one hundred only whichever is more.”

“FR.22(I)(a)(2).- When the appointment to the new post does not involve such

assumption of duties and responsibilities of greater importance, he shall draw as

initial pay, the stage of the time-scale which is equal to his pay in respect of the old

post held by him on regular basis, or, if there is no such stage, the stage next above

his pay in respect of the old post held by him on regular basis.”

19. Rule 22(I)(a)(1) provides that when a government servant is promoted or

appointed to a higher post and the higher post he is promoted carries duties and

responsibilities of greater importance than those attaching to the post held by him,

his initial pay in the time-scale of the higher post shall be fixed at the stage next

above the notional pay arrived at by increasing his pay in respect of the lower post

held by him regularly by an increment at the stage at which such pay has accrued or

rupees one hundred only whichever is more. According to FR.22(I)(a(2), the benefit

of an additional increment, which is available to a government servant under FR.22

(I)(a)(1), would not be available to the government servant if the higher post he is

promoted or appointed to does not carry duties and responsibilities of greater

importance than those attaching to the post held by him. Even, according to FR.22-

C, the additional increment was to be granted only in cases where the incumbent on

promotion or appointment to a higher post has to discharge the duties and

responsibilities of greater importance. Therefore, in cases where on promotion or

appointment to the higher post no duties and responsibilities of greater importance -

than those being discharged in the post held by the incumbent regularly prior to the

promotion - were to be discharged by the government servant, the pay fixation

formula is provided for under FR.22(I)(a)(2) according to which benefit of

additional increment is not to be extended at the time of fixation of pay on the

promotional post.

20.The primal question for consideration in these appeals is as to whether

provisions of FR.22-C or FR.22(I)(a)(1) and FR.22(I)(a)(2) would apply to the

appellants-teachers.

21.The admitted position in the case on hand is that the post of Assistant

Teachers, on promotion to the higher/selection grade, does not carry any duties and

responsibilities of greater importance than those attached to the post held by them

regularly prior thereto. It is also admitted position that on the day the Resolution

was issued by the State Government, i.e., 18

th

December, 1989, which laid down the

criteria for fixation of pay, etc., FR.22-C was not even in existence. The submission

of the learned counsel appearing on behalf of the appellants is that it is FR. 22-C

which is applicable to the case of the appellants herein and not FR.22(I)(a)(1) or

FR.22(I)(a)(2) as, according to him, FR.22-C was incorporated by adoption in the

Resolution and deletion of the said rule prior to its adoption in the Resolution dated

18.12.1989 and any amendment or substitution of that rule would not automatically

delete, amend or substitute the same. This submission of Shri Mishra, even if it were

to be accepted, would be of no help to the appellants herein as even under FR.22-C

an incumbent would get benefit of additional increment at the time of fixation of pay

only in the event of the higher post, he is promoted or appointed, carries duties and

responsibilities of greater importance, which admittedly is not so in the case on

hand. It appears that on the day the Resolution was issued by the State

Government, i.e., on 18.12.1989, the officials of the State of Bihar, who were

responsible for issuing the Resolution, were unaware of the fact that FR.22-C had

already been substituted and in place thereof FR.22(I)(a)(1) and FR.22(I)(a)(2) had

been inserted as otherwise there was no reason to apply the rule - which had already

been substituted - to the appellants-teachers- and not the rule which was there on

the statute book on the day of issuance of the Resolution i.e., the substituted

provisions of FR.22-C. As quoted above, Clause 13 of Resolution dated 18.12.1989

begins with, “the State Government have decided that revised pay scale indicated in

Schedule II be extended to teachers in these schools and the provisions under the

Central Government regarding training, eligibility for appointment and promotion

and other service conditions be made applicable to them as far as possible” and sub-

clause [vii] thereof, provides that “pay fixation on promotion shall be governed by

rule 22-C of the Fundamental Rules and instructions issued by the Central

Government for their teachers from time to time”.

22.Clause 13, therefore, makes it clear that vide Resolution dated 18.12.1989

the State Government decided that the provisions under the Central Government

regarding training, eligibility for appointment and promotion and other service

conditions would be made applicable as far as possible to the teachers of the

Nationalised School in the State of Bihar and that their pay fixation on promotion

shall be governed by FR.22-C and instructions issued by the Central Government

for their teachers from time to time. Therefore, in the light of what is provided

under Clause 13 of the said Resolution, as aforesaid, the submission that even after

substitution of FR.22-C, the pay fixation on promotion would still be governed by

the said rule and not by the amended rule is bound to be rejected. Having regard to

the provisions of Clause 13 of Resolution dated 18.12.1989, we hold that pay

fixation on promotion of the assistant teachers of Nationalised Schools in the State

of Bihar would be governed by FR.22(I)(a)(1) and FR.22(I)(a)(2), as the case may

be, and not by FR.22-C, which was not even in existence on the day Resolution

dated 18.12.1989 was issued by the Finance Department of the Government of

Bihar. Insofar as the appellants-teachers are concerned, since they were not

discharging any duties and responsibilities of greater importance on their promotion

to the higher post/grade, which is sine qua non for being eligible for an additional

increment, they would be governed by FR.22(I)(a)(2) and not by FR.22(I)(a)(1).

23.Since, having regard to the provisions of Clause 13 of the Resolution, we

have held that appellants – teachers on their promotion to the higher post/grade

would be governed by the amended provisions of FR.22-C, i.e., FR.22(I)(a)(1) and

FR.22(I)(a)(2) we need not go into the submission made by the learned counsel

appearing on behalf of the appellants that FR.22-C having been incorporated by

adoption in the Resolution, deletion of the said rule prior to its adoption in the

Resolution or any amendment or substitution of that rule would not automatically

delete, amend or substitute the same.

24. The question that now arises is as to whether the amended provisions would

have prospective or retrospective application. It is the submission of learned

counsel appearing on behalf of the appellants – teachers that Office Order dated

16.11.2000, whereby instructions have been issued to fix the pay of the appellants-

teachers as per the amended provisions of FR.22-C, i.e,. FR.22(I)(a)(2), should be

applied prospectively and not retrospectively. Alternative submission in this regard

is that since decision of the learned Single Judge in CWJC No. 2405 of 1997

holding that the amendment of sub-clause (ii) of Clause 13 of Resolution dated

18.12.1989 by Resolution dated 20.2.1993 in the case of teachers referred to in the

said sub-clause would apply prospectively i.e., w.e.f. from 20.2.1993, had attained

finality, the letters patent appeal against which having been dismissed by the

Division Bench of the High Court and the State Government having not challenged

the said decision before this Court, the question of making the Office Order dated

16.11.2000 effective from a date prior to 20.2.1993 does not arise. On the other

hand, learned counsel appearing on behalf of the respondents – State of Bihar

submitted that insofar as decision in CWJC No. 2405 of 1997 is concerned, it is not

at all relevant in the case on hand as the challenge in that writ petition was to the

amendment made in sub-clause (ii) of Clause 13 whereas in the case on hand, the

cases of teachers covered by sub-clauses (iii), (iv) and (v) of Clause 13 are to be

decided. Ordinarily, we would have held that the amended provisions of FR.22-C

would apply to the appellants – teachers w.e.f. 16.9.1989, i.e., the date from which

the amended provisions of FR.22-C were notified. But, in the peculiar facts and

circumstances of this case and having regard to the fact that the State

Government did not move this Court against the decision of the Division Bench

whereby letters patent appeal preferred by the State Government challenging

judgment of the learned Single Judge holding that Resolution dated 20.2.1993

amending sub-clause (ii) of Clause 13 of the Resolution would apply to the class of

teachers referred to in the said sub-clause prospectively i.e., w.e.f. the date of

issuance of the Resolution dated 20.2.1993, was dismissed, we hold that FR.22(I)(a)

(2) shall apply to the teachers of Secondary Schools also w.e.f. 20.2.1993.

25. We now come to the question as to whether the amount that has been paid in

excess to the appellants-teachers should be recovered or not. It is the submission of

the learned counsel appearing on behalf of the appellants – teachers that even if it

were to be held that the appellants were not entitled to the benefit of additional

increment on promotion, the excess amount that has been paid to the appellants

cannot and should not be recovered; it having been paid without any

misrepresentation or fraud on their part.

26.From the record that has been produced before us, there is not an iota of

doubt that officials of the State Government, responsible for issuing Resolution

dated 18.12.1989, were ignorant of the amended provisions of the FR.22-C and it is

their inaction, negligence and carelessness which has created all the chaos in the case

on hand. Further, until January 1999, the officials of the Education Department of

the Government of Bihar were unaware of the amendment in the said rule until the

Accountant General, Government of Bihar, on a query being made to him by the

Director of Secondary Education, who is the head of the Department of the

Secondary Education in the State of Bihar, vide his letter dated 8.1.1999, responded

to the said query that the officials of the Education Department came to know of the

amendment in FR. 22-C. That apart, it also appears from the record produced

before us that while the Finance Department of the Government of Bihar was in

favour of making the amended provisions of FR. 22-C applicable to the appellants-

teachers after having come to know that the said rule did not exist and had been

substituted, the Department of Human Resource Development, Government of

Bihar, wanted to apply the unamended provision to the appellants-teachers so as to

make available the benefit of additional increment provided for under FR.22-C to its

teachers, unaware of the fact that even under FR.22-C they were not entitled to the

additional increment as they were not discharging duties and responsibilities of

greater importance on the promoted post. This further goes on to show that the

authorities in the State of Bihar were not even aware of the basic requirement for

grant of additional increment and the decision appears to have been taken without

proper application of mind. Otherwise, there was no reason for the Finance

Department to state in the counter affidavit filed before the High Court that any

affidavit filed on behalf of the Education Department may be ignored as Finance

Department was the competent authority. In this very affidavit, the Finance

Department while admitting that the pay fixation by the Education Department was

wrong, stated as under:-

“…the fixation of pay under Fundamental Rule 22-C has wrongly

been made as it was not in existence. Pay fixation on the basis of a non-existent rule

is a bona fide mistake.”

27.This Court, in a catena of decisions, has granted relief against recovery of

excess payment of emoluments/allowances if (a) the excess amount was not paid on

account of any misrepresentation or fraud on the part of the employee and (b) if

such excess payment was made by the employer by applying a wrong principle for

calculating the pay/allowance or on the basis of a particular interpretation of

rule/order, which is subsequently found to be erroneous. The relief against recovery

is granted by courts not because of any right in the employees, but in equity,

exercising judicial discretion to relieve the employees from the hardship that will be

caused if recovery is ordered. But, if in a given case, it is proved that the employee

had knowledge that the payment received was in excess of what was due or wrongly

paid, or in cases where the error is detected or corrected within a short time of

wrong payment, the matter being in the realm of judicial discretion, courts may, on

the facts and circumstances of any particular case, order for recovery of the amount

paid in excess. See Sahib Ram vs. State of Haryana , 1995 Supp. (1) SCC 18,

Shyam Babu Verma vs. Union of India , [1994] 2 SCC 521; Union of India vs. M.

Bhaskar , [1996] 4 SCC 416; V. Ganga Ram vs. Regional Jt., Director, [1997] 6 SCC

139; Col. B.J. Akkara [Retd.] vs. Government of India & Ors . (2006) 11 SCC 709;

Purshottam Lal Das & Ors ., vs. State of Bihar, [2006] 11 SCC 492; Punjab

National Bank & Ors . Vs. Manjeet Singh & Anr . , [2006] 8 SCC 647; and Bihar

State Electricity Board & Anr . Vs. Bijay Bahadur & Anr ., [2000] 10 SCC 99.

28.Undoubtedly, the excess amount that has been paid to the appellants –

teachers was not because of any misrepresentation or fraud on their part and the

appellants also had no knowledge that the amount that was being paid to them was

more than what they were entitled to. It would not be out of place to mention here

that the Finance Department had, in its counter affidavit, admitted that it was a

bona fide mistake on their part. The excess payment made was the result of wrong

interpretation of the rule that was applicable to them, for which the appellants

cannot be held responsible. Rather, the whole confusion was because of inaction,

negligence and carelessness of the officials concerned of the Government of Bihar.

Learned counsel appearing on behalf of the appellants-teachers submitted that

majority of the beneficiaries have either retired or are on the verge of it. Keeping

in view the peculiar facts and circumstances of the case at hand and to avoid any

hardship to the appellants-teachers, we are of the view that no recovery of the

amount that has been paid in excess to the appellants-teachers should be made.

29.Learned counsel also submitted that prior to the interim order passed by this

Court on 7.4.2003 in the special leave petitions, whereby the order of recovery

passed by the Division Bench of the High Court was stayed, some

instalments/amount had already been recovered from some of the teachers. Since

we have directed that no recovery of the excess amount be made from the appellant-

teachers and in order to maintain parity, it would be in the fitness of things that the

amount that has been recovered from the teachers should be refunded to them.

30.In the result, the appeals are allowed in part, the impugned judgment so far

as it relates to the direction given for recovery of the amount that has been paid in

excess to the appellants – teachers is set aside and that part of the impugned

judgment whereby it has been held by the Division Bench that the amended

provisions of FR.22-C would apply to the appellants-teachers is upheld. We direct

that no recovery of the excess amount, that has been paid to the teachers of

Secondary Schools, be made, irrespective of the fact whether they have moved this

Court or not. We also direct that the amount that has been recovered from some of

the teachers, after the impugned judgment was passed by the High Court,

irrespective of the fact whether they have moved this Court or not, be refunded to

them within three months from the date of receipt of copy of this judgment.

………………… ..J.

[B.N. AGRAWAL]

………………………… J.

[HARJIT SINGH BEDI]

………………… J.

[G.S. SINGHVI]

NEW DELHI,

DECEMBER 16, 2008.