Retrospective recovery of consultancy remuneration is unsustainable without prior notice absent employee fraud or misrepresentation.

The applicant, a former BSNL Assistant Manager who retired on 31 October 2013, was engaged by the Department of Telecommunications as a Consultant from 13 April 2016.

The Department initially fixed his remuneration at Rs.13,305 per month plus Dearness Allowance, and later, by sanction order dated 17 May 2018, revised it to Rs.34,194 plus Dearness Allowance with retrospective effect.

On 10 December 2018, the Department retrospectively reduced the remuneration to Rs.28,155 and determined Rs.1,93,497 as recoverable, on the ground that the earlier fixation had wrongly taken account of deputation pay rather than substantive pay.

The applicant challenged the recovery; Rs.80,000 was deducted from his remuneration, and his subsequent request for refund was rejected on 3 January 2022. His earlier O.A. No. 1319/2019 had been disposed of after the parties submitted that the reliefs sought there had been addressed.

1. Whether the Tribunal should decline to entertain the application because the applicant, engaged as a Consultant after retirement from BSNL, was not a holder of a civil post.

2. Whether the respondents could retrospectively revise the applicant’s remuneration and recover amounts already paid under the Department’s earlier sanction, absent fraud or misrepresentation and without prior notice or hearing.

3. Whether the applicant’s request that any recovery be made in instalments amounted to an admission of liability.

Under Section 19 of the Administrative Tribunals Act, 1985, the applicant invoked the Tribunal’s jurisdiction to challenge the departmental orders.

In Col. B.J. Akkara (Retd.) v. Government of India, (2006) 11 SCC 709, relief from recovery of excess payments may be considered where the overpayment resulted from the employer’s erroneous application of a rule and was not caused by the recipient’s fraud or misrepresentation; such relief is equitable and depends on the circumstances, rather than being automatic.

Bhagwan Shukla v. Union of India, (1994) 6 SCC 154, supports affording an affected person an effective opportunity to be heard before an adverse retrospective alteration of financial entitlement.

The categories in State of Punjab v. Rafiq Masih (White Washer), (2015) 4 SCC 334, are not mechanically applicable to every consultant or contractual appointee, though its equitable principle concerning harsh or iniquitous recovery remains relevant.

The Tribunal noted that the Department itself had fixed and revised the remuneration, and that the alleged error arose from its treatment of the applicant’s pay; there was no allegation that the applicant had misrepresented facts or committed fraud.

Although the respondents could examine and correct the applicable rate, they retrospectively treated payments already made under the departmental sanction as recoverable, without first giving the applicant an opportunity to respond.

The Tribunal therefore found the recovery procedurally unfair and inequitable, while clarifying that Rafiq Masih did not automatically protect the applicant as a consultant.

The applicant’s conditional request for instalments, made while disputing the recovery, was not treated as an unconditional admission of liability. The Tribunal also found the 2022 rejection insufficiently reasoned.

The orders dated 10 December 2018 and 1 March 2019, and the communication dated 3 January 2022, were set aside to the extent that they retrospectively created and directed recovery of liability without due process and an opportunity to be heard.

The respondents remained at liberty to take any action permissible under the applicable rules, instructions and law after following due process and giving the applicant an appropriate hearing.

The Tribunal did not direct refund of any amount already recovered; it noted that the record did not establish whether the full Rs.1,93,497 had been recovered. No order as to costs was made.