Post-retirement recovery of excess pay is impermissible absent employee misrepresentation.

The appellant was appointed to a Class III post in the Directorate of Adult Education in 1985. His services, along with those of other employees, were terminated by a common order dated 28 February 1993; the termination was set aside in C.W.J.C. No. 4716 of 1993, and the employees were directed to be absorbed.

In 2001, their services were again terminated following the closure of the Non-Formal Education Project. During the ensuing litigation, the appellant was absorbed in another department, including the Integrated Child Development Services (ICDS), initially on an ad hoc basis and later treated as permanently absorbed.

The appellant claimed that his pre-absorption service should be counted for ACP/MACP benefits. He also challenged the withdrawal of pay-fixation benefits granted through Annexure P-11 and Annexure P-11/A, contending that the withdrawal was arbitrary and discriminatory. The State maintained that the 2005 absorption was a fresh appointment excluding past-service benefits, and that the earlier pay fixation was erroneous.

The learned Single Judge upheld the State’s position, including the applicability of separate pre-2006 pay scales and the legality of the relevant ICDS order. The appellant thereafter preferred the present Letters Patent Appeal.

1. Whether the appellant’s service rendered before his absorption in 2005 was required to be counted for purposes of ACP/MACP and other service benefits?

2. Whether the appellant was entitled to claim the higher pay-scale benefits on the basis of the bifurcation of the clerical cadre into Lower Division Clerk and Upper Division Clerk?

3. Whether recovery of excess payments made pursuant to the impugned pay fixation was legally sustainable after the appellant’s retirement, in the absence of misrepresentation or fraud on his part?

The Court applied the conditions governing the appellant’s absorption, under which the 2005 appointment was treated as a fresh appointment and did not confer a right to count prior service.

It relied on Rule 22 of the MACP Rules, 2010, recognising the appellant’s entitlement to ACP/MACP benefits subject to the applicable service and pay-scale conditions.

The Court further held that the existence of two distinct clerical pay scales before 1 January 2006 prevented the appellant from relying on Annexure P-10 to claim the asserted higher benefit.

On recovery, the Court relied on State of Punjab v. Rafiq Masih (White Washer), (2015) 4 SCC 334, and Jageswar Sahoo v. The District Judge, Cuttack, 2025 INSC 449, which restrict recovery of excess payments, particularly from retired employees and where the employee was not guilty of misrepresentation or fraud.

The Court found no error in the Single Judge’s conclusion that the terms of the appellant’s absorption governed the computation of his service benefits and did not permit automatic counting of his pre-absorption service.

Although Rule 22 of the MACP Rules entitled him to ACP/MACP consideration, that entitlement did not override the applicable appointment conditions or establish a right to the disputed higher pay scale.

Since separate pay scales existed for LDCs and UDCs before 1 January 2006, Annexure P-10 could not support the appellant’s claim for the higher scale.

However, the recovery was materially different: the State did not allege any misrepresentation by the appellant, and the recovery was sought after his retirement. Applying the principles in Rafiq Masih and Jageswar Sahoo, the Court held that such recovery was impermissible.

The Court affirmed the findings rejecting the appellant’s claim that his pre-absorption service should confer the disputed higher pay-scale or related benefits.

However, it set aside the recovery direction contained in the order dated 23 October 2017, holding that recovery from the retired appellant was unsustainable in the absence of misrepresentation or fraud.

The Letters Patent Appeal was accordingly disposed of, along with any pending applications.