Employers may rectify erroneously granted dual benefits but are barred from recovering excess payments from Group C and D employees.

The petitioners (UT of J&K) challenged various orders of the Central Administrative Tribunal (CAT), Jammu, which had quashed recovery proceedings and salary/pension re-fixations against employees of the Hydraulic/PHE departments.

The employees had historically received higher pay scales (Rs. 950-1500) under SRO 59 of 1990 and subsequent departmental circulars from 1993.

Upon the implementation of SRO 14 of 1996 (providing in-situ promotions), the Government alleged these employees were receiving illegal "dual benefits".

In 2021, the Finance Department mandated a verification process to rectify these errors and recover excess payments.

The CAT ruled in favor of the employees, citing a 24-month bar on verifying emoluments preceding retirement and the inequity of recovery.

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

2. Whether the petitioners are legally entitled to recover excess payments made to Group 'C' and Group 'D' employees over several decades.

The Court applied Article 242 of the J&K Civil Service Regulations (CSR) and the subsequent amendments via S.O. 129 (2022), which inserted Instruction No. 2 to allow verification beyond 24 months in cases of "undue benefit of deleted/withdrawn SROs".

It relied on the principle from *Syed Abdul Qadir v. State of Bihar* [2009 (3) SCC 475] that relief against recovery is an equitable discretion, not a vested right.

Most critically, it applied the criteria established in *State of Punjab v. Rafiq Masih (White Washer)* [2015 AIR (SC) 696], which prohibits recovery from Group 'C' and 'D' employees or where excess payments span more than five years.

The Court distinguished between "correctness of emoluments" (clerical/arithmetical errors) and the "unauthorized grant of dual benefits".

It reasoned that Instruction No. 1 to Article 242 was never intended to permit employees to indefinitely retain benefits to which they had no fundamental entitlement.

By interpreting S.O. 129, the Court found that the Government explicitly excluded cases of withdrawn/deleted SRO benefits from the 24-month verification bar.

Regarding the merits, the Court found that SRO 59 and SRO 14 were mutually exclusive as they served the same objective of pay up-gradation; thus, the respondents were erroneously drawing dual benefits.

However, applying the *Rafiq Masih* doctrine, the Court noted the respondents were Group 'C' and 'D' employees who had received these payments for decades without any fraud on their part.

Consequently, while the *future* pay could be corrected to prevent a recurring loss to the exchequer, the *past* recovery was deemed iniquitous and harsh.

It held that the State is at liberty to re-fix the pay and pension of the respondents by excluding the wrongly granted dual benefits moving forward.

However, it permanently restrained the petitioners from recovering the excess amounts already paid, citing the respondents' status as Group 'C' and 'D' employees and the long duration of the error.

Any amounts already recovered were ordered to be refunded within the period prescribed by the Tribunal.