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2026 Supreme(Online)(CAT) 5165

CENTRAL ADMINISTRATIVE TRIBUNAL
Om Prakash-VII, Judicial Member
Lal Singh Bainada – Appellant
Versus
Union of India – Respondent
Original Application No. 330/01160 of 2014



Advocates:
For the Appellants/Petitioners: Ashish Srivastava
For the Respondents: Vandana Srivastava, K.P Singh

An employer cannot unilaterally recover alleged excess pay resulting from their own error without issuing a show-cause notice and providing the employee a reasonable opportunity to be heard, as such action violates principles of natural justice.

Headnote:(A) Administrative Tribunals Act, 1985 - Section 19 - Pay fixation - Recovery of excess payment - Principles of natural justice - Applicant’s pay reduced and recovery effected without show-cause notice - No misrepresentation or fraud by applicant - Held, recovery in absence of fault and without due process is arbitrary and unsustainable. (Paras 9, 13, 14, 15)

(B) Financial irregularities - Rectification by employer - While employer has authority to correct erroneous pay fixation, such correction cannot be effected unilaterally without following due process of issuing a show-cause notice and affording an opportunity of hearing. (Paras 6, 14, 16)

Facts of the case:
The applicant sought to quash an order of pay reduction and recovery of alleged excess payment. The respondents claimed the applicant had opted for an incorrect pay fixation upon ad hoc promotion. Recovery was initiated without prior notice or hearing.

Findings of Court:
The Tribunal found the recovery process violated principles of natural justice, noting no fault or fraud on the applicant's part, and quashed the recovery order.

Issues: Whether recovery of alleged excess payment from an employee, without notice or opportunity of hearing and in the absence of misrepresentation, is legally sustainable.

Ratio Decidendi: An employer cannot unilaterally reduce pay or recover excess payments resulting from their own error without providing the employee an opportunity to be heard, as this violates the principles of natural justice.

Result: Original Application allowed.

Table of Content
1. overview of applicant's promotional history, pay fixation disputes, and recovery grievances. (Para 1 , 2 , 3 , 4)
2. arguments regarding violation of natural justice in recovery and justification for error correction. (Para 5 , 6 , 7)
3. court establishes that unilateral recovery without notice violates natural justice precedents. (Para 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15)
4. final order quashing recovery and directing immediate refund. (Para 16)

(O R D ER)

BY JUSTICE OM PRAKASH-VII, MEMBER (J)

The present Original Application has been filed by the applicant under section 19 of the Administrative Tribunal Act, 1985 seeking following reliefs:-

“(i) This Hon'ble Tribunal may be pleased to quash the impugned order dated 06.11.2012 passed by the respondent No.3 (Annexure No. A-1 to this original application) this Hon'ble Tribunal further quash the pay slip for the month of May & June 2013 and August, 2014 so far as it is concern to recovery of over payment against the applicant.

(ii) This Hon'ble Tribunal may graciously be pleased to direct the respondents that while implementing the pay fixation in compliance of the court's order they may not take any significance of the order of penalty of withholdment of increment for two years awarded to the applicant in the year 1992 and has come to end in the year 1995; otherwise it would amount double jeopardy.

(iii) This Hon'ble Tribunal may graciously be direct the respondents to release the entire amount and pay the applicant the difference of arrear alongwith 24% interest thereupon.

(iv) This Hon'ble Tribunal may graciously be pleased to direct the respondents to refund the amount of recovery with admissible interest thereupon.

(v) Any other relief, which this Hon'ble Tribunal may deem fit and proper in the circumstances of the case may be given in favour of the applicant.

(vi) Award the costs of the original application in favour of the applicant”.

2. The brief facts of the case are that the applicant was initially appointed as Junior Clerk on 22.01.1983 in Jhansi Division. He was promoted as OS-II on 01.01.1984 in the pay scale of Rs. 550–750/-, thereafter as OS-I w.e.f. 28.08.1985, and later as Chief Office Superintendent on 01.09.1998 in the pay scale of Rs. 7450–11500/-. Since the applicant was not granted promotion to the post of OS-II from the due date and his pay was not correctly fixed, he filed OA No. 2447 of 1989 before the CAT, Principal Bench, New Delhi. The matter was subsequently challenged before the Hon’ble High Court New Delhi which allowed in favour of the applicant. In compliance with the judgment of the Hon’ble High Court, the respondents granted promotion to the applicant as OS-II w.e.f. 01.01.1984 in the pay scale of Rs. 550–750/- and thereafter as OS-I w.e.f. 28.08.1985 in the pay scale of Rs. 700–950/-. Pursuant thereto, vide order dated 08.10.2009, the respondents issued orders regarding pay fixation. Thereafter, the Senior Divisional Finance Manager, Allahabad, passed final pay fixation orders and revised the pay of the applicant in the pay band of Rs. 15600–39100 with Grade Pay of Rs. 6600 w.e.f. 09.02.2007 under the 6th CPC. Being aggrieved, the applicant submitted a representation dated 22.01.2010, followed by reminders dated 25.07.2011 and 05.09.2011. However, vide impugned order dated 06.11.2012, the respondents again revised the pay of the applicant by reducing it by two stages and fixed it at Rs. 29,620/- w.e.f. 01.07.2009, with consequential refixation thereafter. Further, a sum of Rs. 10,397/- was recovered from the salary of the applicant for the month of May 2013 and Rs. 10,398/- from the salary for June 2013 on the ground of alleged excess payment, without issuing any notice or affording an opportunity of hearing, thereby violating the principles of natural justice. Against the said action, the applicant submitted a representation dated 10.05.2013, followed by reminders dated 11.03.2013 and 25.11.2013, which remained pending. Being

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