Recovery of excess salary is impermissible if paid without employee misrepresentation and causing extreme financial hardship.

The petitioner, a Computer Operator at the Principal District Court, Dharmapuri, was appointed on 01.09.2015 and completed her probation on 10.01.2018.

On 28.11.2022, the third respondent issued an order (R.O.C. No. 5084/2022) following an internal audit objection, asserting that annual increments granted between 2017 and 2019 were inadmissible.

Consequently, the petitioner’s pay was downwardly revised, and a recovery of excess salary amounting to Rs. 1,23,589/- was ordered in 36 installments.

The petitioner challenged this order seeking regularisation and the quashing of the recovery.

1. Whether the authorities are empowered to rectify errors in pay fixation and recover excess public money paid to an employee.

2. Whether the recovery of excess salary is permissible when the error was committed by the establishment without any misrepresentation by the employee.

Statement identifying a key statute, principle, or precedent: The Court applied the principle that while authorities may rectify pay fixation errors to prevent unjust gain of public money, recovery is impermissible if it causes extreme hardship or if the employee is not at fault.

Statement on the doctrine derived from a case: It relied heavily on the landmark precedent State of Punjab v. Rafiq Masih (White Washer) (2015 4 SCC 334), which prohibits recovery from Group C/D employees, or where the excess payment was made for more than five years before the recovery order, or where recovery would be iniquitous and harsh.

The Court observed that while the administration has the right to correct pay scales according to Pay Rules and Government Orders, the respondents failed to establish any misrepresentation or fraud by the petitioner.

Since the error was solely committed by the Establishment and several years had lapsed, the Court reasoned that enforcing recovery would lead to extreme hardship.

Applying the Rafiq Masih guidelines, the Court determined that the petitioner’s case fell within the protected categories where the "equitable balance" tilts in favor of the employee against the employer's right to recover.

The respondents were directed to refund any amount already recovered from the petitioner within twelve weeks. No order was made as to costs.