Recovery of excess salary from Group C employees after five years is impermissible absent fraud or misrepresentation.

The applicant was appointed as a Lower Division Clerk in 2001 on compassionate grounds following his father’s death.

He was promoted to Upper Division Clerk (UDC) on 02.07.2012 and subsequently to the post of Assistant on 23.01.2023.

Following the applicant's transfer from Agra to Prayagraj, the respondents issued an impugned order dated 17.07.2023, directing the recovery of ₹1,43,602 in 15 monthly installments from his salary.

The respondents claimed that an internal audit in 2023 revealed a wrong pay fixation dating back to his promotion in 2012.

The applicant challenged the recovery, contending that he committed no fraud or misrepresentation and that the recovery initiated after 11 years was delayed and caused financial hardship.

1. Whether the recovery of excess salary payments from a Group ‘C’ employee is permissible when the error was committed by the department without any fraud or misrepresentation by the employee.

2. Whether a recovery order issued more than five years after the initial wrong pay fixation is legally sustainable.

The Tribunal primarily relied on the landmark judgment of the Hon’ble Supreme Court in State of Punjab and Others v. Rafiq Masih (White Washer) (2015) 4 SCC 334.

This precedent establishes that recoveries by employers are impermissible in specific situations of hardship, notably: (i) from employees belonging to Class-III and Class-IV (Group ‘C’ and ‘D’) service, and (ii) where the excess payment has been made for a period in excess of five years before the order of recovery is issued.

The Tribunal found that the applicant is a Group ‘C’ employee and that the higher pay fixation was a unilateral act of the respondents with no evidence of fraud or misrepresentation attributed to the applicant.

It noted that the recovery was initiated in 2023 for a mistake occurring in 2011-2012, clearly exceeding the five-year limit prescribed by the Supreme Court.

The Tribunal rejected the respondents' argument that the applicant’s gross salary of ₹72,000 precluded a finding of hardship, holding instead that recovery from a low-paid employee after such a long duration is inherently iniquitous, arbitrary, and contrary to the equitable balance required by law.

It held that the recovery was contrary to the law established in Rafiq Masih regarding Group ‘C’ employees and delayed recovery actions.

The respondents were directed to refund the amount already recovered from the applicant's salary, along with interest at the existing Bank rate, within three months from the date of receipt of the order.