Recovery of Excess Pay From Group C Employees Due to Departmental Error Is Impermissible Under Law

The petitioner was appointed as a Copyist in 1995 and promoted to Typist in 2000.

Upon completing the required years of service, her pay was fixed on 01.01.2016 in the revised pay structure with a grade pay of Rs. 4,200/-.

On 16.03.2024 and 06.11.2024, the 3rd respondent issued orders revising the petitioner’s pay downward and ordering a recovery of Rs. 10,04,614/- on the grounds that excess payments had been made between 14.08.1995 and 30.09.2023.

The petitioner challenged these orders via a Writ of Certiorarified Mandamus.

1. Whether the authorities have the power to rectify errors in pay fixation and grant the correct pay as per applicable Rules.

2. Whether the recovery of excess salary from a Group C/Class III employee, paid due to administrative error and not misrepresentation, is permissible after a significant lapse of time.

The Court emphasized that unjust gain of public money is impermissible, and authorities are empowered to rectify pay fixation errors under relevant Pay Rules.

The court strictly applied the restrictive principles regarding recovery of excess payments as established by the Supreme Court of India in State of Punjab v. Rafiq Masih (White Washer) (2015) 4 SCC 334.

This precedent prohibits recovery from Class III and IV employees, retired employees (or those near retirement), and cases where excess payment was made for more than five years before the recovery order.

The Court acknowledged that the establishment committed an error in pay fixation, and since there was no misrepresentation or fraud on the part of the petitioner (a Typist), she could not be penalized for the department's mistake.

While the court upheld the administration's right to correct the pay scale going forward to prevent unjust enrichment, it found that the actual recovery of Rs. 10,04,614/- would cause "extreme hardship" given the long duration of the error (nearly 28 years).

Applying the Rafiq Masih criteria, the Court noted that the petitioner belonged to a service category (Class III/Group C) protected from such recoveries and that the period of overpayment far exceeded five years.

The Court quashed and set aside the recovery of the excess salary amount and directed the respondents to refund any amount already recovered from the petitioner within 12 weeks of receiving the order.