Excess-pay recovery is impermissible where employer error, prolonged delay, and hardship weigh against recovery.

The petitioner, initially appointed as a Record Clerk, challenged an order directing recovery of ₹46,883 in 23 instalments.

Following an internal audit objection, the respondents revised her pay fixation, finding that her pay had been fixed at Level 3 instead of Level 2 and that subsequent increments were consequently erroneous.

The proposed recovery related to excess payments made from 8 November 2017 to 31 July 2022.

The petitioner sought to quash the recovery order and obtain repayment of any amount already recovered.

Whether the respondents could recover excess salary paid because of an erroneous pay fixation made without any misrepresentation by the petitioner.

Whether the respondents’ revision of the petitioner’s pay fixation should be set aside along with the recovery direction.

The Court relied on State of Punjab v. Rafiq Masih, (2015) 4 SCC 334, which identifies circumstances in which recovery of excess payments from employees would be impermissible, including recovery from certain classes of employees, retired or soon-to-retire employees, payments made for more than five years before the recovery order, and cases where recovery would be inequitable, harsh, or arbitrary.

The Court also recognised that the competent authorities may correct an erroneous pay fixation and grant the pay applicable under the relevant Pay Rules and Government Orders.

The Court found that the respondents had not established that the petitioner misrepresented any facts when her pay was fixed; the error was attributable to the establishment.

It considered recovery of the resulting excess salary, after the passage of time, unduly harsh to the petitioner.

Applying the equitable principles in Rafiq Masih, the Court therefore distinguished between correcting the pay fixation—which it permitted—and recovering the resulting excess payments—which it disallowed.

It confirmed the revision of pay made pursuant to the audit objection but set aside the impugned order insofar as it directed recovery of excess salary.

Any amount already recovered was directed to be repaid to the petitioner within 12 weeks from receipt of a copy of the order.