Recovery of excess payments from Group C and D employees resulting from administrative error is impermissible.

The Government of UT of J&K (petitioners) challenged multiple orders of the Central Administrative Tribunal (CAT), Jammu, which had quashed the recovery of alleged "dual benefits" from employees (respondents) of the Jal Shakti/PHE Department.

The respondents, belonging to Group ‘C’ and ‘D’, had been receiving higher pay scales purportedly under SRO 59 of 1990/circulars of 1993, while also receiving *in-situ* promotion benefits under SRO 14 of 1996.

Following a 2021 Finance Department audit, the Government sought to re-fix pay/pension and recover excess payments, arguing that SRO 14 superseded SRO 59.

The Tribunal had restrained such recoveries and ordered the restoration of original pay/pension based on Government Instruction No. 1 to Article 242 of the CSR, which limits service record verification to 24 months preceding retirement.

1. Whether the 24-month bar on verifying the "correctness of emoluments" under Government Instruction No. 1 to Article 242 of the J&K CSR applies to cases involving unauthorized dual benefits or systemic administrative errors.

2. Whether the Government is entitled to re-fix pay/pension and recover excess amounts from Group ‘C’ and ‘D’ employees after several decades.

Article 242 of the J&K Civil Service Regulations (CSR), Vol-I, specifically focusing on Government Instruction No. 1 (limiting pay verification to 24 months before retirement).

Government Instruction No. 2 via S.O. 129 of 2022, which waives the 24-month restriction where employees received benefits of deleted/withdrawn SROs.

The equitable principles established in State of Punjab v. Rafiq Masih (2015), which prohibits recovery from Class-III/IV employees or where payments exceeded five years.

Syed Abdul Qadir v. State of Bihar (2009) regarding the use of judicial discretion to prevent hardship.

Sita Ram v. UT of J&K (2025) which held that while a mistake in pay fixation can be rectified, recoveries may be barred.

The Court distinguished between "correctness of emoluments" (clerical/arithmetical errors) and the "unauthorized grant of dual benefits."

It reasoned that Instruction No. 1 was never intended to protect a class of employees from the rectification of a fundamental illegality or dual enrichment at the public exchequer's expense.

The Court noted that SRO 59 and SRO 14 were mutually exclusive as they served the same objective of granting higher scales.

Consequently, the Government retains a perpetual right to rectify erroneous pay structures, especially as S.O. 129 (Instruction No. 2) explicitly removed the 24-month bar for withdrawn SROs.

However, citing *Rafiq Masih*, the Court found that because the respondents were Group ‘C’ and ‘D’ employees and the excess payments spanned decades due to the petitioners' own lapses, actual recovery would be "iniquitous" and cause undue hardship.

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

However, it ordered that no recovery of the excess amounts already paid shall be made; any amounts already recovered must be refunded within the timeframe set by the Tribunal.

The Court concluded that while administrative errors cannot create a vested right to future overpayment, equity bars the clawback of past payments from low-income groups.