Government may rectify erroneous contractual pay fixation but cannot recover excess payments absent employee fraud or misrepresentation.

The petitioners applied pursuant to an advertisement dated 20 December 2013 for appointment as Junior Scale Stenographers on contract basis. The advertisement and subsequent appointment orders mentioned the pay scale of ₹10,300–34,800 with Grade Pay of ₹3,200 and fixed contractual emoluments of ₹13,500 per month. The petitioners were appointed and paid accordingly.

After approximately one year, the respondents issued a corrigendum dated 6 November 2015, stating that the applicable scale was ₹5,910–20,200 with Grade Pay of ₹2,800, carrying fixed contractual emoluments of ₹8,710 per month. Show-cause notices dated 28 November 2015 were thereafter issued seeking recovery of the alleged excess payments made from July 2015 onwards.

The respondents contended that the higher scale had been mentioned due to a typographical or inadvertent error in the advertisement and appointment orders. The applicable scale had already been prescribed under the Notification dated 27 September 2011 and clarified by the corrigendum dated 15 October 2012, which provided that the higher scale would be available only after two years of regular service.

The petitioners challenged the reduction in emoluments and the proposed recovery. The proceedings originally instituted before the Himachal Pradesh Administrative Tribunal were transferred to the High Court after abolition of the Tribunal.

Whether the respondents were legally entitled to correct the pay scale and reduce the petitioners’ contractual emoluments from ₹13,500 to ₹8,710 per month when the advertisement and appointment orders had incorrectly mentioned the higher scale?

Whether the respondents could recover the excess payments made to the petitioners in the absence of fraud, misrepresentation, or fault on their part?

Whether the doctrines of promissory estoppel and the principle that the “rules of the game” cannot be changed midway protected the petitioners’ entitlement to the higher pay scale?

Service conditions of State employees are governed by the applicable statutory rules and notifications; an erroneous representation in an advertisement or appointment order cannot confer an entitlement contrary to those rules.

Under the principle stated in Anil Joshi v. State of H.P., (2015) 12 SCC 669, promissory estoppel against the State requires an express promise supported by adequate evidence, lawful authority, and alteration of position in reliance upon that promise.

The principle in Tej Prakash Pathak v. Rajasthan High Court, (2025) 2 SCC 1, that the rules of the game cannot be changed midway, applies where the governing rules are altered during the selection process, but not where an existing rule was merely implemented after correcting an earlier mistake.

At the same time, recovery of excess payments is impermissible where the employee neither misrepresented facts nor committed fraud, particularly when the excess payment resulted solely from the employer’s mistake.

The governing notifications and corrigendum prescribed the Junior Scale Stenographer’s applicable scale as ₹5,910–20,200 with Grade Pay of ₹2,800, with the higher scale becoming applicable only after two years of regular service.

The Court held that the petitioners’ entitlement had to be determined by the statutory notifications and the corrigendum dated 15 October 2012, not by the erroneous figures reproduced in the advertisement and appointment orders.

Since the applicable rules prescribed contractual emoluments of ₹8,710 per month, the respondents had authority to rectify the mistake and reduce the payments; this did not amount to changing the recruitment rules midway.

The Court rejected the promissory-estoppel argument because the promised higher scale was contrary to the governing rules and therefore lacked legal foundation.

However, the excess payments resulted from the respondents’ own mistake, and there was no allegation or finding of fraud or misrepresentation by the petitioners. Accordingly, although the respondents could correct the future pay fixation, they could not recover amounts already paid to the petitioners.

The Court upheld the respondents’ authority to fix the petitioners’ contractual emoluments at ₹8,710 per month in accordance with the applicable statutory notifications and rejected their claim to protection of the erroneously stated higher scale.

However, the respondents were restrained from recovering the amounts alleged to have been paid in excess under the show-cause notices, since the petitioners had neither committed fraud nor made any misrepresentation.

The petition was accordingly disposed of without an order as to costs.