Recovery of excess salary is impermissible after prolonged delay absent employee misrepresentation.

The petitioner was appointed as a Stenographer Grade III on 25 June 1999 and was subsequently promoted as Stenographer Grade I with effect from 2 March 2015.

An internal audit of the High Court found that her pay had been wrongly fixed and that she had received an inadmissible promotional increment.

Pursuant to the audit objection, the respondents ordered recovery of excess pay and allowances amounting to ₹4,47,106 for the period from 1 April 2006 to 31 October 2025, through the order dated 9 December 2025 in Dis. No. 3005/2025.

The petitioner challenged the recovery and sought reimbursement of the amount deducted from her salary from November 2025.

The respondents were unable to establish that the petitioner had made any misrepresentation in relation to the pay fixation.

Whether the respondents were entitled to recover the excess pay and allowances arising from an erroneous pay fixation made by the establishment, in the absence of any misrepresentation by the petitioner.

Whether recovery of ₹4,47,106, relating to payments made over a period exceeding five years, would be impermissible on account of the hardship and inequity caused to the petitioner.

Whether the revised pay fixation made pursuant to the audit objection could nevertheless be sustained.

The Court held that authorities competent under the applicable Pay Rules and Government Orders may rectify an erroneous pay fixation and continue the correct revised fixation; however, recovery of excess salary may be impermissible where the excess payment resulted from the employer’s mistake, without employee misrepresentation, and recovery after a prolonged period would cause undue hardship.

The Court relied on State of Punjab v. Rafiq Masih, (2015) 4 SCC 334, which identifies situations where recovery is impermissible, including recovery from Class III/Class IV or Group C/Group D employees, retired employees or those nearing retirement, recovery relating to payments made for more than five years before the recovery order, and cases where recovery would be iniquitous, harsh or arbitrary.

The governing principle is that the employer’s right to correct an erroneous pay fixation does not invariably include a right to recover past excess payments when recovery would be inequitable.

The Court distinguished between correction of the petitioner’s future pay and recovery of past payments.

Since the erroneous promotional increment resulted from an establishment-level mistake and there was no demonstrated misrepresentation by the petitioner, the petitioner could not be penalised for the error after many years.

The proposed recovery covered the period from 1 April 2006 to 31 October 2025, substantially exceeding the five-year period identified in Rafiq Masih.

Recovery after such a long interval was therefore found to impose extreme hardship and to be inequitable.

At the same time, the Court accepted the respondents’ authority to revise the pay fixation in accordance with the applicable Pay Rules and Government Orders.

The revised pay fixation made pursuant to the audit objection was confirmed, but the recovery of ₹4,47,106 towards excess pay and allowances was set aside.

Any amount already recovered pursuant to the impugned order was directed to be repaid to the petitioner within twelve weeks from the date of receipt of a copy of the order.

The connected miscellaneous petition was closed, with no order as to costs.