Recovery of excess pay from retiring employees is impermissible absent misrepresentation, though pay scale correction remains valid.

The respondent, a Sub-Inspector of Police, retired on superannuation on 31.05.2024.

On the eve of his retirement, the appellants (State authorities) issued an order to recover excess salary paid to him due to an alleged erroneous pay fixation.

The respondent challenged this via W.P. No. 36189 of 2024.

The Writ Court, on 06.10.2025, directed the authorities to reconsider the pay fixation upon the respondent’s representation and ordered the refund of recovered amounts with interest.

The State preferred this appeal against the Writ Court's order, primarily contesting the restriction on recovery and the award of interest.

1. Whether the State is entitled to recover excess salary paid to a retired employee due to an administrative error in pay fixation.

2. Whether the respondent is entitled to interest on the refund of amounts already recovered by the State.

While no Government servant is entitled to unjust gain through erroneous pay fixation, recovery from employees on the eve of retirement is generally impermissible due to resulting hardship, unless the excess payment resulted from the employee's misrepresentation or an express undertaking.

The authority retains the inherent power to correct errors in the scale of pay in accordance with applicable Pay Rules and Government Orders.

The Court acknowledged the State's power to correct pay fixation errors to prevent unjust enrichment.

The court reasoned that recovery against a retiring employee causes undue hardship, echoing established judicial caution against such actions unless the employee is at fault for the error via misrepresentation.

The Court found that while the scale of pay can be corrected prospectively or for the purpose of calculating pensionary benefits, the actual recovery of past excess payments was inequitable in this context.

The Bench upheld the liberty given to the authorities to re-fix pay according to service records and rules, but found the award of interest on the refunded amounts to be unjustified.

The Court affirmed that any amount already recovered must be refunded to the respondent; however, it specifically set aside the Writ Court’s order regarding the payment of interest.

The Court partly allowed the writ appeal without costs.