Recovery of Erroneous Pay Is Impermissible From Group C and D Employees, Though Pay Re-fixation Remains Valid.

The Government of J&K challenged several orders of the Central Administrative Tribunal (CAT) which had quashed recoveries and directed the restoration of higher pay/pension for employees in the Jal Shakti/PHE Department

The employees (respondents) had been receiving higher pay scales (Rs. 950-1500) purportedly under circulars from 1993 and SRO 59 of 1990

The Government contended that upon the implementation of SRO 14 of 1996 (providing in-situ promotions), the benefits of SRO 59 were superseded, and the respondents were illegally drawing "dual benefits"

The Government sought to re-fix pay and recover excess payments made over several decades, while the respondents argued such action was barred by Government Instruction No. 1 to Article 242 of the CSR, which limits pay verification to 24 months preceding retirement

The Court relied on Article 242 of the J&K Civil Service Regulations (CSR), specifically Instruction No. 1 regarding the 24-month limitation for emolument verification

The Court relied on the subsequent S.O. 129 dated 28.03.2022, which inserted Instruction No. 2 to waive that limitation in cases of undue benefit from deleted/withdrawn SROs

It applied the equitable principles established in Syed Abdul Qadir v. State of Bihar

It applied the equitable principles established in State of Punjab v. Rafiq Masih (White Washer), which prohibits recoveries from Class-III and Class-IV (Group C and D) employees or retired staff where payment was made by mistake

The Court also referenced ITC Ltd. v. State of U.P. regarding the protection of innocent employees from hardship caused by the employer’s wrong interpretation of rules

The Court distinguished between "correctness of emoluments" (clerical/arithmetical errors covered by the 24-month bar) and the "unauthorized grant of dual benefits" to a whole class of employees, holding that the latter does not fall under the restrictive scope of Instruction No. 1

The Court reasoned that Instruction No. 2 (S.O. 129) explicitly clarified that the government can safeguard the exchequer against losses from withdrawn SROs regardless of the timeline

On the facts, the Court found the respondents had indeed received "dual benefits" under SRO 59 and SRO 14 due to departmental oversight

However, since the respondents are Group ‘C’ and ‘D’ employees, the Court determined that while the government has a right to correct future pay/pension to prevent unjust enrichment

The recovery of past payments would be "iniquitous" and cause undue hardship as per the Rafiq Masih guidelines

It held that the State is at liberty to re-fix the pay and pension of the respondents by excluding the wrongly granted dual benefits

However, the Court strictly prohibited the petitioners from effecting any recovery of the excess amounts already paid; any amounts already recovered must be refunded within the period prescribed by the Tribunal

The High Court concluded that "once a mistake is always a mistake," justifying re-fixation, but equity shields Group C and D employees from the hardship of repayment