MEKHA RAM AND OTHERS ETC. ETC. versus STATE OF RAJASTHAN AND OTHERS ETC. ETC. on 29 March 2022

1. Feeling aggrieved and dissatisfied with the impugned commonjudgment and order dated 06.05.2016 passed by the Division Bench ofHthe High Court of Judicature for Rajasthan, Jaipur Bench Jaipur in D.B.

Special Appeal (Writ) No. 1883/2014 and other connected appeals, bywhich the Division Bench of the High Court has allowed the said appealsand has quashed and set aside the respective judgments and orders passedby the learned Single Judge of the High Court and held that the threeyears Nursing Course by the in-service candidates could not be treatedas a period on deputation and be treated only on leave whatever due tothe candidates and consequently has reserved the liberty in favour ofthe State to recover the excess amount paid to the original writ petitionerstreating the period of training as a period of leave permissible to him/herin easy equal installments, the original writ petitioners have preferredthe present appeals.

2. That the original writ petitioners are working either as ANM(Auxiliary Nursing & Midwifery) or Lab Technician, Multi-PurposeWorker, Accounts Clerk or other similarly situated posts. They are themembers of the Rajasthan Medical & Health Subordinate Service Rules,1965. They applied for the course of General Nursing Training which isof three years duration and is regulated according to the General NursingTraining Course Rules, 1990 (hereinafter referred to as the ‘Rules 1990’).

2.1 That all the original writ petitioners submitted their applications,in the prescribed proforma as in-service candidates, seeking admissionto the course of General Nursing as envisaged under Rule 9 of the Rules1990. That all the in-service candidates were required to be consideredeligible to seek admission provided they fulfilled the criterion for admissionand eligibility under Rule 11 of the Rules 1990. All the original writpetitioners submitted their applications for seeking study leave knowingit fully well that joining three years Nursing Course cannot be treated ondeputation for the in-service candidates. All the original writ petitionerscompleted their course or some of them were either doing their internshipor a few, after completion of their internship, filed writ petitions beforethe learned Single Judge of the High Court and prayed that the studyleave sanctioned to them by the competent authority may be treated ason deputation. That the learned Single Judge allowed the batch of writpetitions with the following directions:

“Looking to the aforesaid, these writ petitions are being disposedof with the following directions:

1. Respondents are directed to comply with the observationsand expectations of the Hon’ble Apex Court as given in thecase of Sushil Sharma (supra) [State of Rajasthan vs. Sushil AB

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Sharma, Civil Appeal No. 5283/2001, dated 10.08.2001],thereby, they will not allow benefit of deputation allowanceto anyone in violation of rule 112 read with rule 97 of theRSR. This is irrespective of the categories of the post inthe respondent department; A

2. If there is shortage of Junior Specialist, endeavour shouldbe to amend the Rules so that direct recruitment can bemade, as presently aforesaid post is filled up by promotiononly. However, on the pretext of shortage of JuniorSpecialist, respondents cannot be allowed to violate orcircumvent the rules. This is more so when it goes evenagainst the observations and expectations of the Hon’bleApex Court in the case of Sushil Sharma (supra). Therespondents will accordingly allow study leave and benefitthereupon as per rule 111 and 112 read with rule 97 of theRSR; B

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3. Since for many posts, benefit of study leave with full salaryhas been allowed, hence, to avoid discrimination, respondentshave agreed to extend similar benefit to the petitioners also,however, arrangement aforesaid would be limited to thosewho have already joined the training course of GNM andnow onwards nobody would be allowed study leave benefitin violation of the provision of RSR; E

4. Compliance of the aforesaid order may be made within aperiod of one month from the date of receipt of copy of thisorder.”

F2.2 That thereafter the State preferred intra-court appeals before the Division Bench. The Division Bench permitted the State to file reviewapplications. The State filed review applications before the learned SingleJudge, which came to be dismissed.Subsequently, the State again filedintra-court appeals before the Division Bench against the judgment(s)Gand order(s) passed by the learned Single Judge, allowing the writ petitionsand holding that the original writ petitioners are entitled to treat theirperiod of training as the period on leave permissible to him/her. By theimpugned common judgment and order, the Division Bench of the HighCourt has allowed the intra-court appeals and while approving the earlierdecision of the learned Single Judge has held that the period spent onHtraining course by the in-service candidates shall not be treated as a period on deputation and be treated only on leave whatever due to thecandidates. That as during the pendency of the intra-court appeals, underthreat of the contempt of the judgment and order passed by the learnedSingle Judge, the original writ petitioners were paid the amount and holdingthat the period of training is to be treated as period on leave permissibleto him/her, the Division Bench also directed that the State shall be atliberty to recover the excess amount paid to the original writ petitionersduring their period of training as a period of leave permissible to him/herin easy equal installments.

2.3 Feeling aggrieved and dissatisfied with the impugned commonjudgment and order passed by the Division Bench of the High Courtreserving liberty in favour of the State to recover the excess amountpaid, the original writ petitioners have preferred the present appeals.

3. At the outset, it is required to be noted that this Court issuednotice in the present special leave petitions/appeals limited to the aspectof the recovery of the amounts from the original writ petitioners, asdirected in the impugned judgment and in the meanwhile directed stay ofrecovery. In that view of the matter, the only issue which is now requiredto be considered is, whether there shall be recovery of the amountsfrom the original writ petitioners, as directed in the impugned judgmentand order passed by the Division Bench of the High Court.

4. Shri R.K. Singh, learned Advocate appearing on behalf of theoriginal writ petitioners has heavily relied upon the decision of this Courtin the case of State of Punjab v. Rafiq Masih, reported in (2015) 4SCC 334. Relying upon the aforesaid decision, it is vehemently submittedthat as observed and held by this Court, recovery from the employeesbelonging to Class III and Class IV service (Group C and Group Dservice) is impermissible.

4.1 Learned counsel appearing on behalf of the original writpetitioners has prayed and submitted that as the respective original writpetitioners are serving on Class III and Class IV posts, the amount alreadypaid in excess may not be recovered by the State. In the alternative, it isprayed that the original writ petitioners may be given reasonable monthlyinstallments to repay the amount which is paid in excess to them.

5. Dr. Manish Singhvi, learned Senior Advocate appearing onbehalf of the State has submitted that the decision of this Court in thecase of Rafiq Masih (supra), which has been relied upon by the learned AB

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Acounsel appearing on behalf of the original writ petitioners, is not applicableto the facts of the case on hand. It is submitted that in the aforesaid casethe amount was paid to the employees mistakenly by the State/Stateauthorities which was sought to be recovered and under thosecircumstances this Court observed and held that the recovery of theexcess amount paid is impermissible in case of employees belonging toBClass III and Class IV service (Group C and Group D service). It issubmitted that in the present case, it is not the case where the amount inexcess was paid mistakenly by the State or the State authorities. Ratherthe excess amount was paid pursuant to the order passed by the learnedSingle Judge, under the threat of the contempt proceedings, which orderChas now been set aside by the Division Bench. It is submitted that oncethe order passed by the learned Single Judge, pursuant to which theoriginal writ petitioners were paid the amount, came to be set aside bythe Division Bench, the necessary consequences shall follow and on theprinciple of restitution, the State shall be entitled to recover the amountpaid in excess.D

5.1 Reliance is placed on the decision of this Court in the case ofIndore Development Authority v. Manohar Lal, reported in (2020)8 SCC 129 (paragraphs 334 to 336) and the decision of this Court inthe case of South Eastern Coalfields Ltd. v. State of M.P., reportedin (2003) 8 SCC 648 (paragraphs 25 to 30), on the principle of restitution.E

5.2 Making the above submissions and relying upon the aforesaiddecisions, more particularly the decisions of this Court on the principleof restitution, learned Senior Advocate appearing on behalf of the Statehas submitted that in the facts and circumstances of the case, the DivisionBench of the High Court has not committed any error in permitting theFState to recover the excess amount paid. However, the learned SeniorAdvocate has fairly stated that the original writ petitioners may be givenreasonable installments, which even the Division Bench has observed inthe impugned judgment.

6. We have heard the learned counsel for the respective partiesGat length.

At the outset, it is required to be noted that in the present casethe amount paid in excess to the appellants was not due to any mistakeon the part of the State/State authorities. The excess amount has beenpaid pursuant to the order passed by the learned Single Judge, which hasHbeen subsequently set aside by the Division Bench. Therefore, on quashing and setting aside the judgment and order passed by the learnedSingle Judge under which the original writ petitioners were paid the excessamount, the necessary consequences must follow. Therefore, consideringthe fact that the amount already paid in excess was not paid by the Statemistakenly but was paid pursuant to the order passed by the learnedSingle Judge which has been set aside subsequently, the decision of thisCourt in the case of Rafiq Masih (Supra) shall not be applicable. Thesaid decision of this Court may be applicable only in a case where theamount has been paid by the State/State Authorities mistakenly and it isfound that there was no fault and/or any misrepresentation on the partof the employee and that the concerned employee is not found responsiblefor such excess amount paid mistakenly. The amount paid in excesspursuant to the order passed by the learned Single Judge which hasbeen set aside by the Division Bench has to be refunded and/or returnedby the original writ petitioners which the State is entitled to recover fromthem on the principle of restitution.

6.1 At this stage, the decision of this Court in the case of IndoreDevelopment Authority (supra) on principle of restitution is required tobe referred to. In the said decision, a Constitution Bench of this Courtafter considering the earlier decision in the case of South EasternCoalfields (supra) and other decisions on the principle of restitution,has observed and held in paragraphs 335 to 336 as under:

In re : Principle of restitution

“335. The principle of restitution is founded on the ideal of doingcomplete justice at the end of litigation, and parties have to beplaced in the same position but for the litigation and interim order,if any, passed in the matter. In South Eastern CoalfieldsLtd. v. State of M.P. [South Eastern Coalfields Ltd. v. State ofM.P., (2003) 8 SCC 648], it was held that no party could takeadvantage of litigation. It has to disgorge the advantage gaineddue to delay in case lis is lost. The interim order passed by thecourt merges into a final decision. The validity of an interim order,passed in favour of a party, stands reversed in the event of a finalorder going against the party successful at the interim stage.Section 144 of the Code of Civil Procedure is not the fountainsource of restitution. It is rather a statutory recognition of the ruleof justice, equity and fair play. The court has inherent jurisdictionto order restitution so as to do complete justice. This is also on the A

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principle that a wrong order should not be perpetuated by keepingit alive and respecting it. In exercise of such power, the courtshave applied the principle of restitution to myriad situations notfalling within the terms of Section 144 CPC. What attractsapplicability of restitution is not the act of the court being wrongfulor mistake or an error committed by the court; the test is whether,on account of an act of the party persuading the court to pass anorder held at the end as not sustainable, resulting in one partygaining an advantage which it would not have otherwise earned,or the other party having suffered an impoverishment, restitutionhas to be made. Litigation cannot be permitted to be a productiveindustry. Litigation cannot be reduced to gaming where there isan element of chance in every case. If the concept of restitutionis excluded from application to interim orders, then the litigantwould stand to gain by swallowing the benefits yielding out of theinterim order. This Court observed in South EasternCoalfields [South Eastern Coalfields Ltd. v. State of M.P.,(2003) 8 SCC 648] thus: (SCC pp. 662-64, paras 26-28)

“26. In our opinion, the principle of restitution takes care ofthis submission. The word “restitution” in its etymological sensemeans restoring to a party on the modification, variation orreversal of a decree or order, what has been lost to him inexecution of decree or order of the court or in directconsequence of a decree or order (see Zafar Khan v. Boardof Revenue, U.P. [Zafar Khan v. Board of Revenue, U.P.,1984 Supp SCC 505] ). In law, the term “restitution” is used inthree senses : (i) return or restoration of some specific thing toits rightful owner or status; (ii) compensation for benefitsderived from a wrong done to another; and (iii) compensationor reparation for the loss caused to another. (See Black’s LawDictionary, 7th Edn., p. 1315). The Law of Contracts by JohnD. Calamari & Joseph M. Perillo has been quoted by Black tosay that “restitution” is an ambiguous term, sometimes referringto the disgorging of something which has been taken and attimes referring to compensation for the injury done:

‘Often, the result under either meaning of the term would bethe same. … Unjust impoverishment, as well as unjustenrichment, is a ground for restitution. If the defendant is guiltyof a non-tortious misrepresentation, the measure of recovery

is not rigid but, as in other cases of restitution, such factors asrelative fault, the agreed-upon risks, and the fairness ofalternative risk allocations not agreed upon and not attributableto the fault of either party need to be weighed.’

The principle of restitution has been statutorily recognised in Section144 of the Code of Civil Procedure, 1908. Section 144 CPC speaksnot only of a decree being varied, reversed, set aside or modifiedbut also includes an order on a par with a decree. The scope ofthe provision is wide enough so as to include therein almost all thekinds of variation, reversal, setting aside or modification of a decreeor order. The interim order passed by the court merges into a finaldecision. The validity of an interim order, passed in favour of aparty, stands reversed in the event of a final decision going againstthe party successful at the interim stage. …

27. … This is also on the principle that a wrong order shouldnot be perpetuated by keeping it alive and respecting it (A.Arunagiri Nadar v. S.P. Rathinasami [A. ArunagiriNadar v. S.P. Rathinasami, 1970 SCC OnLine Mad 63] ). Inthe exercise of such inherent power, the courts have appliedthe principles of restitution to myriad situations not strictly fallingwithin the terms of Section 144.

28. That no one shall suffer by an act of the court is not a ruleconfined to an erroneous act of the court; the “act of the court”embraces within its sweep all such acts as to which the courtmay form an opinion in any legal proceedings that the courtwould not have so acted had it been correctly apprised of thefacts and the law. … the concept of restitution is excludedfrom application to interim orders, then the litigant wouldstand to gain by swallowing the benefits yielding out ofthe interim order even though the battle has been lost at theend. This cannot be countenanced. We are, therefore, of theopinion that the successful party finally held entitled to a reliefassessable in terms of money at the end of the litigation, isentitled to be compensated by award of interest at a suitablereasonable rate for the period for which the interim order ofthe court withholding the release of money had remained inoperation.”

(emphasis supplied)

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336. In State of Gujarat v. Essar Oil Ltd. [State ofGujarat v. Essar Oil Ltd., (2012) 3 SCC 522 : (2012) 2 SCC(Civ) 182] , it was observed that the principle of restitution is aremedy against unjust enrichment or unjust benefit. The Courtobserved : (SCC p. 542, paras 61-62)

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“61. The concept of restitution is virtually a common lawprinciple, and it is a remedy against unjust enrichment or unjustbenefit. The core of the concept lies in the conscience of thecourt, which prevents a party from retaining money or somebenefit derived from another, which it has received by way ofan erroneous decree of the court. Such remedy in English Lawis generally different from a remedy in contract or in tort andfalls within the third category of common law remedy, whichis called quasi-contract or restitution.

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62. If we analyse the concept of restitution, one thing emergesclearly that the obligation to restitute lies on the person or theauthority that has received unjust enrichment or unjust benefit(see Halsbury’s Laws of England, 4th Edn., Vol. 9, p. 434).”

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In the said decision, it is further observed and held that therestitution principle recognizes and gives shape to the idea that advantagessecured by a litigant, on account of orders of court, at his behest, shouldEnot be perpetuated.

6.2 In the case of Ouseph Mathai v. M. Abdul Khadir, reportedin (2002) 1 SCC 319, it is observed and held that after the dismissal ofthe lis, the party concerned is relegated to the position which existedprior to the filing of the petition in the court which had granted the stay.

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6.3 Even otherwise, no one can be permitted to take the benefitof the wrong order passed by the court which has been subsequently setaside by the higher forum/court. As per the settled position of law, noparty should be prejudiced because of the order of the court.

7. Even, Section 144 of the Code of Civil Procedure provides forGrestitution. Section 144 of the CPC reads as under:

“144. Application for restitution – (1) Where and insofar as adecree or an order is varied or reversed in any appeal, revision orother proceeding or is set aside or modified in any suit institutedfor the purpose, the Court which passed the decree or order shall, H

on the application of any party entitled in any benefit by way ofrestitution or otherwise, cause such restitution to be made as will,so far as may be, place the parties in the position which theywould have occupied but for such decree or order or such partthereof as has been varied, reversed, set aside or modified; and,for this purpose, the Court may make any orders, including ordersfor the refund of costs and for the payment of interest, damages,compensation and mesne profits, which are property consequentialon such variation, reversal, setting aside or modification of thedecree or order.

Explanation – For the purposes of sub-section (1) the expression“Court which passed the decree or order shall be deemed to include, (a)Where the decree or order has been varied or reversed inexercise of appellate or revisional jurisdiction, the Court offirst instance; (b)Where the decree or order has been set aside by a separatesuit, the Court of first instance which passed such decreeor order;

(c) Where the Court of first instance has ceased to exist orhas ceased to have jurisdiction to execute it, the Court which,if the suit wherein the decree or order was passed wereinstituted at the time of making the decree or order waspassed were instituted at the time of making the applicationfor restitution under this section, would have jurisdiction totry such suit.

2. No suit shall be instituted for the purpose of obtaining anyrestitution or other relief which could be obtained by applicationunder sub-section (1).”

8. In the present case, the order passed by the learned SingleJudge has been set aside by the Division Bench of the High Court andtherefore by applying Section 144 CPC also, the amount paid pursuantto the order passed by the learned Single Judge which has been setaside by the Division Bench is required to be refunded/returned by theoriginal writ petitioners.

Therefore, in the facts and circumstances of the case, narratedhereinabove, the Division Bench of the High Court is absolutely justified A

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Ain reserving liberty in favour of the State to recover the amount paid inexcess to the original writ petitioners. It is required to be noted that evenwhile reserving liberty to recover the amount paid in excess, the DivisionBench has observed that the same be recovered in easy equal installments.

9. In view of the above and for the reasons stated above, theBDivision Bench of the High Court has not committed any error in reservingliberty in favour of the State to recover the amount paid in excess to theoriginal writ petitioners. However, at the same time, considering the prayermade on behalf of the original writ petitioners to recover the amount ineasy equal installments, we direct that whatever amount is paid in excessto the original writ petitioners, pursuant to the order passed by the learnedCSingle Judge, be recovered from the original writ petitioners in thirty-sixequal monthly installments, to be deducted from their salary commencingfrom April, 2022.

10. The instant appeals are accordingly disposed of in the aforesaidterms. No costs.D

Nidhi Jain