Recovery for erroneous pay fixation from Group C employees without fraud or misrepresentation is impermissible.

The applicants are six ex-servicemen (PBORs) who retired from the Indian Air Force prior to 01.01.2006 and were re-employed in civilian posts at the Ordnance Factory, Kanpur between 2006 and 2007.

Their pay was initially fixed in 2010 based on DoPT OM dated 05.04.2010, granting them pay protection by notionally revising their last drawn basic pay.

In 2020, following revised interpretations from the CGDA and subsequent DoPT OMs from 2017, the respondents issued an order dated 06.01.2020 to withdraw the higher pay fixation, re-fix their pay at the entry-level for direct recruits, and recover the alleged excess payments made over the previous decade.

During the pendency of the OA, the respondents issued further orders on 21.08.2021 and 25.08.2021 to effectuate the re-fixation and recovery.

1. Whether the respondents can retrospectively re-fix the pay of re-employed ex-servicemen after a lapse of 14 years based on subsequent clarifications.

2. Whether the recovery of alleged excess payments from Group 'C' employees is legally permissible in the absence of fraud or misrepresentation.

3. Whether the impugned orders violated the principles of natural justice.

The court primarily applied the legal principles established by the Hon’ble Supreme Court in State of Punjab & Ors v. Rafiq Masih (White Washer), which prohibits recoveries from Group ‘C’ and ‘D’ employees, retired employees, or when excess payment has been made for more than five years.

It further relied on Thomas Daniel v. State of Kerala, affirming that recovery is impermissible where the employee is not at fault for the wrong fixation.

The court also considered the principle from Chandi Prasad Uniyal v. State of Uttarakhand regarding the correction of administrative errors, balanced against the criteria of equity and hardship.

The Tribunal found that the applicants, as Group 'C' employees, had neither committed fraud nor misrepresented facts to obtain the initial pay fixation.

The respondents' attempt to apply 2017 clarifications retrospectively to fixations made in 2010 was deemed impermissible, especially after a gap of approximately 14 years.

The court reasoned that since some applicants had already retired or were nearing retirement, such a substantial recovery would be "iniquitous and harsh," outweighing the employer's right to recover.

The court noted that the respondents failed to issue show-cause notices or afford an opportunity of hearing before passing the recovery orders, thereby violating the principles of natural justice.

The Tribunal allowed the Original Application and quashed the impugned orders dated 06.01.2020, 21.08.2021, and 25.08.2021; the respondents were directed to restore the applicants' pay to the original scale drawn prior to the re-fixation and refund any amount already recovered within three months, along with simple interest at 6% per annum.