From: Enrichment - Restitution & Unjust Enrichment Legal Issues <ENRICHMENT@LISTS.MCGILL.CA>
To: ENRICHMENT@LISTS.MCGILL.CA
Date: 26/09/2012 08:44:47 UTC
Subject: [RDG] Does India follow an Absence of Basis approach?

A couple of Indian Supreme Court judgments have allowed restitutionary relief with no mention whatsoever of any unjust factors. More recently, despite an arguable case for a recognised unjust factor, the Supreme Court of India did not apply any such analysis. The case is Chandi Prasad Uniyal v. Union of India, Civil Appeal 5899 of 2012. The text is available on judis.nic.in, I do not have a direct link unfortunately. An unofficial link to the text is http://indiankanoon.org/doc/12736356/

The Court notes:

"The question that arises for consideration in this appeal is whether over-payment of amount due to wrong fixation of 5th and 6th pay scale of teachers/principals based on the 5th Pay Commission Report could be recovered from the recipients who are serving as teachers... payments were effected due to a mistake but not due to any misrepresentation or fraud..."

The Court then holds:

" We are concerned with the excess payment of public money which is often described as “tax payers money” which belongs neither to the officers who have effected over-payment nor that of the recipients. We fail to see why the concept of fraud or misrepresentation is being brought in such situations. Question to be asked is whether excess money has been paid or not may be due to a bona fide mistake. Possibly, effecting excess payment of public money by Government officers, may be due to various reasons like negligence, carelessness, collusion, favouritism etc. because money in such situation does not belong to the payer or the payee. Situations may also arise where both the payer and the payee are at fault, then the mistake is mutual. Payments are being effected in many situations without any authority of law and payments have been received by the recipients also without any authority of law. Any amount paid/received without authority of law can always be recovered barring few exceptions of extreme hardships but not as a matter of right, in such situations law implies an obligation on the payee to repay the money, otherwise it would amount to unjust enrichment."

I am not too clear on what to make of the last sentence.

A couple of earlier decisions had held that in such over-payment cases, it is a valid defence to say that the amount has been spent due to an increase in spending levels (arguably a change of position, though change of position does not seem to have been expressly discussed), Those cases were explained away, "most of the cases referred to hereinbefore turned on the peculiar facts and circumstances of those cases either because the recipients had retired or on the verge of retirement or were occupying lower posts in the administrative hierarchy."

It is hard to see why the position in the administrative hierarchy is at all relevant. Be that as it may, I wonder if (a) India is explicitly an "absence of basis" jurisdiction, and (b) in any case, whether change of position is accepted in India?
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