Recovery of excess salary is barred for long-standing employer errors absent employee misrepresentation.

The petitioners, employees of the Judicial Department, challenged orders directing recovery of excess salary and refixation of pay after an additional increment had been inadvertently granted on promotion.

The orders followed an Internal Audit objection. The petitioners sought to quash the orders and recover amounts already deducted from their salaries.

The Court found that the error was attributable to the establishment and that the respondents had not established any misrepresentation by the petitioners.

1. Whether the respondents could revise the petitioners’ pay to correct an additional increment granted in error

2. Whether recovery of excess salary was permissible where the overpayment resulted from the establishment’s error, without employee misrepresentation, and recovery after a lapse of years would cause hardship

Under State of Punjab v. Rafiq Masih, (2015) 4 SCC 334, recovery of mistaken excess payments may be impermissible in identified circumstances, including where recovery would be inequitable, harsh or arbitrary and outweigh the employer’s right to recover.

The Court also recognised that competent authorities may correct erroneous pay fixation and apply the pay rules and Government Orders correctly; correction of pay fixation is distinct from recovery of past excess payments.

The petitions invoked Article 226 of the Constitution.

The Court accepted that the additional increment had been granted inadvertently and that the authorities could rectify the error by refixing pay in accordance with the applicable rules and Government Orders.

However, because the error was committed by the establishment, the respondents had not shown misrepresentation by the petitioners, and recovery after many years would cause extreme hardship, the Court applied the equitable principles in Rafiq Masih to bar recovery of the excess amounts.

Amounts already recovered were directed to be repaid to the petitioners within 12 weeks of receipt of the order. No costs were ordered, and the connected miscellaneous petitions were closed.