Recovery of excess salary payments made by an employer due to a wrong interpretation of rules is impermissible if there was no fraud or misrepresentation by the employee, particularly when the recovery is sought after a long time gap or upon the employee's retirement.

1. The order passed by the Deputy Commissioner of Police (Headquarter) Commissionerate Varanasi/respondent No.2 in the year 2025 by which the salary of the petitioner has been revised is under challenge.

2. It is argued by learned counsel for the petitioner that by the aforesaid order, salary of the petitioner has been revised from 01.07.2012. It is argued that the petitioner has been retired from the post of Sub Inspector Civil Police on 31.07.2025. It is argued that the before passing the aforesaid order, no notice or opportunity of hearing has been provided to the petitioner. It is argued that recovery could not be sought from the petitioner for excess payment made during service period after lapse 13 years back. It is argued that nothing has been stated in the order impugned that any fraud or misrepresentation has been made by the petitioner at any point of time or at the time of re-fixation of the pay scale.

3. Learned counsel for petitioner has relied upon judgment rendered by Hon'ble the Supreme Court in Sushil Kumar Singhal v. Pramukh Sachiv Irrigation Department and others reported in (2014)16 SCC 444:2014(2) ESC 271 (SC) in which Hon'ble the Supreme Court was seized of a similar dispute and placing reliance on Government Order dated 16.01.2007 has held that if any mistake had been committed in pay fixation prior to retirement then by virtue of Government Order dated 16.01.2007 neither any salary paid by mistake could have been recovered nor pension could have been reduced since records of 34 months prior to superannuation only could be examined for the purpose of grant of pension.

4. The aforesaid facts have not been disputed by learned Standing Counsel.

5. Recently the Hon'ble Apex Court in the case of Thomas Daniel vs. State of Kerala & Ors. (Civil Appeal No.7115 of 2010) reported in 2022 Supreme(SC) 387 decided on 02.05.2022 held that the state cannot recover the excess amount paid to employees. In this aspect of the matter the paragraph-21 of the judgment delivered by the The Hon'ble Apex Court in the case of Jagdish Prasad Singh vs. State of Bihar and others reported in (2024) 8 SCR 377 also important to note down which reads as follows:-

"21. We firmly believe that any decision taken by the State Government to reduce an employees pay scale and recover the excess amount cannot be applied retrospectively and that too after a long time gap. In the case of Syed Abdul Qadir and Others V. State of Bihar and others, this Court held that when the excess unauthorized payment is detected within a short period of time, it would be open for the employer to recover the same. Conversely, if the payment had been made for a long duration of time, it would be iniquitous to make any recovery. The relevant paras of the Syed Abdul Qadir (supra) are extracted herein below: -

"57. This Court, in a catena of decisions, has granted relief against recovery of excess payment of emoluments/allowances if (a) the excess amount was not paid on account of any misrepresentation or fraud on the part of the employee, and (b) if such excess payment was made by the employer by applying a wrong principle for calculating the pay/allowance or on the basis of a particular interpretation of rule/order, which is subsequently found to be erroneous.

58. The relief against recovery is granted by courts not because of any right in the employees, but in equity, exercising judicial discretion to relieve the employees from the hardship that will be caused if recovery is ordered. But, if in a given c