Employers may re-fix salaries and pensions to rectify dual-benefit errors but cannot recover past excess payments from Group C and D employees.

The Government of Jammu & Kashmir challenged several orders passed by the Central Administrative Tribunal (CAT), Jammu, which had quashed the recovery of excess payments and the re-fixation of pay/pension for employees of the Jal Shakti (formerly PHE) Department

The employees (respondents) had been receiving higher pay scales under SRO 59 of 1990 while simultaneously benefiting from progressive in-situ promotions under SRO 14 of 1996

Following a 2021 Finance Department circular mandating verification, the petitioners sought to rectify this "dual benefit" and recover the overpayments

The CAT ruled in favor of the employees, citing Government Instruction No. 1 to Article 242 of the Civil Service Regulations (CSR), which prohibits re-opening emolument records older than 24 months preceding retirement

1. Whether the 24-month limitation on verifying the "correctness of emoluments" under Instruction No. 1 to Article 242 of the CSR bars the Government from rectifying unauthorized dual benefits

2. Whether the Government is entitled to recover excess payments made over several decades from Group ‘C’ and Group ‘D’ employees

The Court applied Article 242 of the J&K Civil Service Regulations (CSR), specifically Instruction No. 1, which limits pay verification to 24 months prior to retirement

the newly inserted Instruction No. 2 (via S.O. 129 of 2022), which waives this limit in cases of undue benefits from deleted/withdrawn SROs

It relied on the principle of equity regarding recoveries as established in *Syed Abdul Qadir v. State of Bihar*

*State of Punjab v. Rafiq Masih (White Washer)*, which prohibits recoveries from Group ‘C’/‘D’ employees or retired staff where excess payment exceeded five years

The court also referenced *ITC Ltd. v. State of U.P.* regarding the protection of innocent employees from hardships caused by an employer’s wrong interpretation of rules

The Court determined that while Instruction No. 1 usually bars deep historical audits of "correctness of emoluments" (clerical/arithmetical errors), it does not grant a vested right to retain unauthorized "dual benefits"

The Court held that SRO 59 and SRO 14 were mutually exclusive, as both aimed to provide higher pay scales; thus, concurrent benefits were illegal

Following the logic in *Sita Ram v. UT of J&K*, the Court noted that "a mistake is always a mistake," and the government maintains the inherent right to re-fix future pay or pensions to stop unjust enrichment of the public exchequer

However, regarding recovery, the Court found that because the respondents were Group ‘C’ and ‘D’ employees and the error resided solely with the administration for decades, it would be "iniquitous" and "harsh" to demand repayment of funds already spent on basic necessities

It held that the petitioners (Government) are legally permitted to re-fix the pay and pension of the respondents by excluding the wrongly granted dual benefits

However, the Court strictly prohibited the recovery of any excess amounts already paid to the respondents, citing their status as Group ‘C’ and ‘D’ employees and the lapse of several decades

Any amounts already recovered must be refunded within the period prescribed by the Tribunal