Point of Law : Retirement – Fixation of Pay scale - Benefits of - State equips its system in such manner that an excess payment made to an employee during his service tenure, either out of erroneous fixation of pay scale or otherwise, is detected at earliest instead of being detected while the pension papers are settled whereupon attempts are made to protect tax payers' money, obviously after retirement of such an employee and subjecting him to untold hardship.

JUDGMENT :

Dipankar Datta, J.

1. Original Application Nos. 805-807 of 2016, on the file of the Maharashtra Administrative Tribunal, Mumbai Bench, Mumbai (hereafter “the Tribunal” for short), were allowed by the Judicial Member thereof by a common judgment and order dated 5th December 2018. The State of Maharashtra and its officers, being the respondents in all such original applications, have challenged the said judgment and order by presenting these three writ petitions.

2. The common thread that runs through the claims of all three original applicants before the Tribunal is that they have retired from service on diverse dates while holding Class III/Group ‘C’ posts and their retirement benefits have been withheld on the ground that while in service, they had been paid salary in excess of their entitlement owing to erroneous fixation of their pay-scale. The question that arose for consideration before the Tribunal was, whether the State is justified in withholding the retirement benefits of the original applicants on the ground as noted above. Considering the decisions of the Supreme Court reported in (2015) 4 SCC 334 [State of Punjab and Others vs. Rafiq Masih (White Washer) and Ors.] as well as (2016) 14 SCC 267 [High Court of Punjab and Haryana and Ors. vs. Jagdev Singh], the Tribunal was of the view that the State was unjustified in seeking to recover excess payment from the retirement benefits of the original applicants. The Tribunal also found, as a matter of fact, that the original applicants were rightly fitted in the appropriate pay-scale commensurate with their status as ‘Instructors’ and, therefore, negated the stand of the State that excess payment had been effected in their favour.

3. We have heard Mr. Pathan, learned Special Counsel appearing in support of the writ petitions and Mr. Bandiwadekar, learned advocate for the original applicants. The question we are tasked to decide is, whether the Tribunal was right in its interference with the impugned action of the State in seeking to recover from the retirement benefits of the original applications any sum paid in excess.

4. In Rafiq Masih (supra), the Supreme Court, upon consideration of previous decisions, proceeded to hold in paragraph 18 as follows :-

18. It is not possible to postulate all situations of hardship which would govern employees on the issue of recovery, where payments have mistakenly been made by the employer, in excess of their entitlement. Be that as it may, based on the decisions referred to hereinabove, we may, as a ready reference, summarise the following few situations, wherein recoveries by the employers, would be impermissible in law :

(i) Recovery from the employees belonging to Class III and IV service (or Group C and Group D service).

(ii) Recovery from the retired employees, or the employees who are due to retire within one year, of the order of recovery.

(iii) Recovery from the employees, when the excess payment has been made for a period in excess of five years, before the order of recovery is issued.

(iv) Recovery in cases where an employee has wrongfully been required to discharge duties of a higher post, and has been paid accordingly, even though he should have rightfully been required to work against an inferior post.

(v) In any other case, where the court arrives at the conclusion, that recovery if made from the employee, would be iniquitous or harsh or arbitrary to such an extent, as would far outweigh the equitable balance of the employer’s right to recover.”

5. Jagdev Singh (supra) had the occasion to consider Rafiq Masih (supra). In paragraph 10, the situations as referred to in paragraph 18 of Rafiq Masih (supra) were quoted, whereafter, it was observed in paragraph 11 as follows: -

“11. The principle enunciated in Proposition (ii) above cannot apply to a situation such as in the present case. In the present case, the officer to whom the payment was made in the first was clearly placed on notice that any payment found to have been ma