Recovery from Group C and D employees for erroneous pay fixation without misrepresentation is impermissible.

The petitioners were initially appointed as Night Watchmen/Masalchis (Class IV) and subsequently promoted to Office Assistants (Class III).

Upon this promotion, they were sanctioned one promotional increment.

An internal audit wing of the High Court later determined that this increment was inadmissible because the transition from Class IV to Class III constitutes a "transfer of service" rather than a "promotion," and the pay scales were identical.

Consequently, the respondents issued various proceedings in 2025 (e.g., Progs. No. 80/2025) to revise the pay and recover the excess allowances already paid.

The petitioners challenged these recovery orders via writ petitions.

1. Whether the authorities are empowered to rectify errors in pay fixation and implement a revised pay scale.

2. Whether the recovery of excess pay and allowances from Class III and Class IV employees is permissible in law when the error was committed by the employer without misrepresentation by the employee.

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

Regarding the recovery of past excess payments, the court relied on the landmark precedent of State of Punjab v. Rafiq Masih (White Washer) (2015) 4 SCC 334.

This judgment establishes that recovery is impermissible from employees belonging to Class III/IV (Group C/D), or when recovery would be iniquitous, harsh, or arbitrary, specifically stating that recovery from such employees, or for payments made over five years prior, is prohibited.

The court found that while the revised pay fixation was valid and should continue because it aligned with Pay Rules and Audit Objections, the recovery of past payments was unsustainable.

The court noted that the respondents failed to establish any misrepresentation by the petitioners during the fixation of pay; rather, it was a clerical error by the Establishment.

Applying the Rafiq Masih guidelines, the court reasoned that the petitioners belong to Class III and IV service, and recovering salary after a lapse of many years would cause "extreme hardship" that outweighs the employer’s right to recover.

The court directed the respondents to refund any amounts already recovered from the petitioners within 12 weeks of the receipt of the order.

All impugned proceedings (Progs. Nos. 80/2025, 57/2025, 54/2025, 313/2025, and 92/2025) were quashed specifically regarding the recovery aspect.