Recovery from Class III employees for employer’s pay fixation error is impermissible absent employee misrepresentation.

The petitioner was appointed as a Steno-Typist Grade-III on a temporary basis in 1997, later re-allotted by TNPSC in 2001, and eventually promoted to Grade-II (2018) and Grade-I (2019).

On 03.09.2025, the third respondent issued Office Order No. 72/2025, seeking to recover Rs. 69,450/- in 35 installments following an internal audit objection.

The audit found that an advance increment granted back on 01.06.2009 was inadmissible.

The petitioner challenged the recovery and the re-fixation of pay through a Writ of Certiorarified Mandamus.

1. Whether the authorities are empowered to rectify errors in pay fixation and recovery of excess public money.

2. Whether the recovery of excess salary after a substantial lapse of time is permissible when there was no misrepresentation by the employee.

The Court applied the principle that unjust gain of public money is impermissible and authorities have the inherent right to rectify pay fixation errors.

State of Punjab v. Rafiq Masih (White Washer) (2015) 4 SCC 334, which prohibits recovery from employees (particularly Class III/Group C) when the excess payment was made for over five years or when such recovery would be iniquitous, harsh, or arbitrary.

The Court observed that while the State has the right to correct pay fixation to align with Pay Rules and Government Orders, it cannot penalize an employee for an establishment error after several years.

Since the respondents failed to establish any misrepresentation or fraud on the part of the petitioner regarding the 2009 increment, the petitioner cannot be held responsible for the administrative mistake.

Applying the Rafiq Masih guidelines, the Court determined that recovering dues after a lapse of 16 years (from 2009 to 2025) would cause extreme hardship and is legally impermissible as it falls under the prohibited categories of recovery from Group C employees and for periods exceeding five years.

The Court quashed and set aside the recovery of the past excess amount and directed the respondents to refund any amount already recovered from the petitioner within twelve weeks.