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2025 Supreme(Gau) 1188

IN THE HIGH COURT OF GAUHATI, NAGALAND, MIZORAM AND ARUNACHAL PRADESH 
Vijay Bishnoi, CJ., N. Unni Krishnan Nair, J.
Surendra Nath Dihingia, S/O- Bongshidhar Dihingia – Petitioner
Versus
The State Of Assam Rep. By The Commissioner And Secretary To The Govt. Of Assam, Department Of Power And Ors. – Respondents
WA/13 of 2025, WA/11 of 2025
Decided On : 27-02-2025

Advocates:
Advocate Appeared:
For the Petitioner: Mr. B Purkayastha, J.P. Baruah,Mr. B Purkayastha, Mr. K N Choudhury
For the Respondent: SC, APDCL, GA, ASSAM

Employees cannot be penalized for erroneous financial upgrades awarded without their fault; recovery of overpayments is impermissible in equity.

Headnote:(A) Assam Power Distribution Company Limited - Office Memorandum dated 30.12.2006 - Financial up-gradation scheme - The appellants, having been granted two financial up-gradations, were ineligible for further upgrades under the scheme. Withdrawal of benefits deemed permissible as no misrepresentation occurred from their side. The re-fixation of pay is upheld, but recovery of excess payments found unjust. (Paras 11, 12, 21, 26, 30)

(B) Principles of Public Employment - Employees cannot be held liable for erroneous payments made without fraud. Courts may prevent recovery to avoid undue hardship on employees acting in good faith. (Paras 24, 26)

(C) Retirement Benefits - Benefits accrued after introduction of up-gradation schemes are applicable only to employees still in service post-implementation. (Paras 29, 30)

Facts of the case:
The appellants were Meter Readers appointed in 1980, promoted later, and retired before the amendment in financial up-gradation scheme. Recovery of excess payments from pensions post-retirement initiated by respondents created legal disputes.

Findings of Court:
While the re-fixation of pay was upheld, the court mandated that previously withdrawn excess payments be refunded to the appellants due to lack of fault on their part.

Issues: Whether appellants were rightly stripped of financial up-gradation benefits and if the recovery of excess was justified upon retirement.

Ratio Decidendi: The court ruled in favor of the appellants regarding excess pay recovery, asserting that previous errors by the employer should not penalize the employees, particularly post-retirement.

Result: Appeals partially allowed; recovery of excess payments ordered to be refunded, and maintenance of revised salary acknowledged.

Table of Content
1. factual background concerning the impact of the financial up-gradation scheme. (Para 2 , 3 , 5)
2. contentions raised by appellants regarding financial benefits and pay fixation. (Para 12 , 13)
3. court's reasoning behind disallowing recovery of overpaid amounts. (Para 21 , 26)
4. final orders regarding financial up-gradations and pension implications. (Para 30 , 34)

JUDGMENT :

N. Unni Krishnan Nair. J.

Heard Mr. K. N. Choudhury, learned Senior Counsel assisted by Mr. B. Purkayastha, learned counsel appearing for the appellants in both the writ appeals. Also heard Mr. P. N. Goswami, learned Advocate General appearing for the State of Assam along with Mr. S. P. Sharma, learned counsel appearing for the respondents in both the writ appeals.

2. The above noted Intra Court Appeals having been so instituted assailing a common Judgment and Order dated 05.11.2024, passed by the learned Single Judge in WP(C) No. 7109/2021, WP(C) No. 128/2022 and WP(C) No. 6901/2021, the writ appeals have been taken up together for hearing analogously and are being disposed of vide the present order.

3. The appellants, in both the writ appeals, were initially appointed as Meter Readers (Grade-II) on 16.12.1980 in the erstwhile Assam State Electricity Board (hereinafter referred to as the ASEB). The appellants were thereafter, on the creation of the Assam Power Distribution Company Limited (hereinafter referred to as the APDCL), absorbed in the said company. The appellant in WA No. 11/2025 was appointed as a Meter Reader (Grade-II) on 16.12.1980 and thereafter, was promoted as a Senior Meter Reader on 02.03.2016. The appellant, thereafter, retired from his services on reaching the age of superannuation w.e.f., 30.09.2019. The appellant in WA No. 13/2025, similarly, was appointed as a Meter Reader (Grade-II) in the erstwhile Assam State Electricity Board and thereafter, on creation of the APDCL, was absorbed in the company. The appellant was promoted as a Senior Meter Reader on 24.11.2014 and thereafter, the appellant retired from his services on reaching the age of superannuation w.e.f., 31.12.2017.

4. The appellants herein, during their service tenure, on completion of 08 years of service were given an up-gradation to the next higher scale of pay in terms of a scheme so prevalent in the organization and thereafter, they were given further up-gradation to the further higher scale of pay on completion of 20 years of service.

5. The ASEB vide an Office Memorandum (OM) dated 30.12.2006, had implemented a financial up-gradation scheme for its employees as well as employees of its successor entities and in terms of the said scheme, 02(two) financial up- gradations during the entire service span of an employee was to be granted by way of up-gradation to the next higher scale of pay, on completion of 10 years of service and thereafter, on completion of 25 years of service. The said scheme was to be come into effect w.e.f., 01.01.2007.

6. In the said scheme, under Para-6, it was stipulated that employees who had received 02(two) regular promotions or two similar benefits of higher pay scales as of 01.01.2007, would not be entitled to the benefits of the financial up-gradation scheme so formulated vide the OM dated 30.12.2006.

7. The appellants herein, were in terms of the financial up-gradation scheme as implemented vide the OM dated 30.12.2006, granted two financial up-gradations vide an Office Order dated 24.10.2008. The said two financial up-gradations were so granted to the appellants to the scale of pay of Rs. 4200-8000/- w.e.f., 01.01.2007 and Rs. 4300-9550/- also w.e.f., 01.01.2007.

8. The respondent authorities while issuing the Office Order dated 24.10.2008, had not taken into account the provisions of Para-6 of the said OM dated 30.12.2006; and had granted to the appellants further 02(two) financial up-gradations under the provisions of the scheme so brought into operation vide the OM dated 30.12.2006. The said aspect of the matter, coming to th

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