1721/2022 - 2026 Supreme(Online)(CAT) 5578

Headnote:(A) Service Law - Recovery of excess payment - SRO-149 of 1973 - Pension - Gratuity - Retiral benefits - The applicant, a retired Class-IV employee, was granted higher pay scale under SRO-149 of 1973, which continued for decades. After retirement, respondents sought to recover alleged excess payment by stepping down pension and withholding gratuity. The court held that recovery from a retired Class-IV employee, without any misrepresentation or fraud, is impermissible in law, relying on State of Punjab v. Rafiq Masih (2015) 4 SCC 334 and other decisions. Further, the benefit under SRO-149 of 1973 stood judicially affirmed by the High Court and Supreme Court, making the department's action unsustainable. (Paras 14-33)

(B) Recovery - When impermissible - The court summarized situations where recovery is impermissible: from Class III/IV employees, from retired/retiring employees, when excess payment was made for more than five years, or where recovery would be iniquitous/harsh/arbitrary. (Para 16)

Facts of the case:
The applicant, a retired Class-IV employee, was granted higher pay scale under SRO-149 of 1973. After retirement on 31.05.2022, the respondents reduced his pension and withheld gratuity, citing alleged excess payment. The benefit had been extended by the respondents themselves and continued for decades without any misrepresentation by the applicant. The matter was earlier kept pending due to a pending SLP before the Supreme Court, which was later dismissed.

Findings of Court:
The impugned order to the extent of stepping down pension and withholding retiral benefits was set aside. The respondents were directed to restore pension based on last pay drawn, release all consequential retiral benefits including gratuity and arrears within eight weeks, and refund any amount already recovered, with 6% interest if defaulted.

Issues: Whether the action of respondents in effecting recovery/adjustment of alleged excess payment from retiral benefits of the applicant by downgrading pension and withholding gratuity is sustainable in law?

Ratio Decidendi: The court held that recovery from a retired Class-IV employee, without any misrepresentation or fraud, is impermissible under settled law. Additionally, since the benefit under SRO-149 of 1973 was judicially affirmed by the High Court and Supreme Court, the respondents cannot unsettle it by invoking general principles of re-fixation.

Result: Original Application allowed. Impugned order set aside. Respondents directed to restore pension and release all retiral benefits within eight weeks. Recovered amounts to be refunded with interest.

Legal Category Hierarchy

1. Applicant contends benefit was legally granted and recovery impermissible; respondents assert right to rectify error and recover. (Para 11 )

2. Impugned order set aside; respondents directed to restore pension and release all retiral benefits within eight weeks. (Para 34 , 35 , 36 , 37 )

3. Is recovery of excess payment from retiral benefits of a retired Class-IV employee permissible in the absence of fraud or misrepresentation?

No. Recovery is impermissible, especially from retired employees belonging to Class III/IV, as held in State of Punjab v. Rafiq Masih. (Para 16 , 19 , 20 , 21 )

4. May an employer re-fix pay and withdraw erroneously granted benefits when the benefit was granted under a judicial order?

No. Once the benefit is crystallized through judicial determination and affirmed by the Supreme Court, the employer cannot unsettle it by re-fixation or recovery. (Para 27 , 28 , 29 , 30 , 31 )

5. Does the pendency of a special leave petition before the Supreme Court justify rejection of an employee's claim for benefits?

No. Once the SLP is dismissed, the ground no longer survives and cannot justify rejection. (Para 22 , 32 )

6. Under what circumstances can recovery be effected from pension under Article 168-A of J&K Civil Services Regulations?

Recovery from pension is permissible only in cases involving misconduct or misappropriation, not for alleged excess payment without such fault. (Para 20 )

JUSTICE RITU TAGORE, MEMBER [JUDL.]

01.The applicant, a retired Class-IV employee, is aggrieved of the action of the respondents whereby, after his retirement on 31.05.2022, his pension has been stepped down and retiral benefits, including gratuity, have been withheld on the ground of alleged excess payment arising out of grant of higher pay scale under SRO-149 of 1973 .

02.Through the medium of the present Original Application, the applicant seeks quashing of the impugned order bearing No. MID/Estt/1313-16 dated 20.06.2022, issued by the Executive Engineer, Mechanical Irrigation Division Baramulla (respondent No. 5) (Annexure–I), sofar as it directs stepping down of the pension of the applicant. The applicant further seeks a direction to the respondents to release hispensionary benefits on the basis of the last pay drawn, along with all consequential benefits.

03.Learned counsel for the applicant submits that the Devendra Digitaly signed by Devendra Tripathi applicant was initially engaged as a daily wager on 14.06.1987 and was subsequently regularized as Helper vide Government Order dated 03.09.1996 with effect from 01.04.1995 in terms of policy in vogue at that time. It is submitted that in terms of SRO-149 of 1973 , skilled and semi-skilled workers, particularly ITI trained employees, were extended the benefit of higher pay scale. This position, it is contended,continued to be maintained under the Pay Rules of 1987 and 1992.

04. It is furthersubmitted that in terms of Pay rules of 1987, general Helper was held entitled to pay scale of 745-1025 and skilled workers were treated as semi –skilled category and were given pay scale of 900-1830. In the pay Rules of 1992, pay scale of the skilled and semi –skilled helpers was revised to 1200-2040 from 900-1830 and general helpers from 745-1025 to 775-1025.

05.It is further submitted that the applicant, being ITI trained, was granted the benefit of higher pay scale and the said position also stood fortified in terms of judgment dated Devendra Digitaly signed by Devendra Tripathi 12.02.1998 (Annexure –II) passed by the Hon’ble High Court in SWP No. 421/1992, pursuant where to similarly situated employees were extended the benefit of higher pay scale and the applicant was also granted the same.

06.Learned counsel further submits that though certain issues were raised in the year 2007 regarding verification of ITI certificates, the case of the applicant was duly verified and the benefit of higher pay scale was reaffirmed in his favor vide order dated 07.06.2007(Annexure-III) .

07.It is contended by the learned counsel for the applicant that the benefit of higher pay scale had been extended to the applicant for over a decade. However, the respondents abruptly issuedCircular dated 22.02.2008(Annexure IV) directing that such benefits be kept in abeyance which resulted in a round of litigation between the parties. Ultimately, the applicant’s claim came to be rejected by the department vide the impugned order on the ground that the matter is subjudice before the Hon’ble Supreme Court. Devendra Digitaly signed by Devendra Tripathi

08.Learned counsel for the applicant submits that the SLP preferred by the respondents, which was cited as pending while rejecting the applicant’s claim, has since been dismissed. In view thereof, it is argued that the ground taken in the impugned order, namely the pendency of the SLP, no longer survives and is not available to the respondents. In support of the aforesaid submission, learned counsel has relied upon the order dated 04.02.2026 passed by the Hon’ble Supreme Court in The State of J&K &Ors. vs. Provincial Power Employees Union &Ors., Civil Appeal No(s). 7992 of 2022, whereby the Special Leave Petition filed by the State of J&K challenging the judgment of the Hon’ble High Court came to be dismissed.

09.It is further submitted that after retirement of the applicant on 31.05.2022, the respondents have sought to withdraw the said benefit and effect recovery by do

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2026 Supreme(Online)(CAT) 5578

CENTRAL ADMINISTRATIVE TRIBUNAL
Ritu Tagore, J
1721/2022
Original Application

Recovery of excess payment from a retired Class-IV employee, without misrepresentation or fraud, is impermissible. Benefits judicially affirmed by the Supreme Court cannot be unsettled by the employer.

Legal Category Hierarchy

Table of Contents

3. Is recovery of excess payment from retiral benefits of a retired Class-IV employee permissible in the absence of fraud or misrepresentation?

4. May an employer re-fix pay and withdraw erroneously granted benefits when the benefit was granted under a judicial order?

5. Does the pendency of a special leave petition before the Supreme Court justify rejection of an employee's claim for benefits?

6. Under what circumstances can recovery be effected from pension under Article 168-A of J&K Civil Services Regulations?

2026 Supreme(Online)(CAT) 5578

CENTRAL ADMINISTRATIVE TRIBUNALRitu Tagore, J1721/2022Original Application

Recovery of excess payment from a retired Class-IV employee, without misrepresentation or fraud, is impermissible. Benefits judicially affirmed by the Supreme Court cannot be unsettled by the employer.

Legal Category Hierarchy

Table of Contents

3. Is recovery of excess payment from retiral benefits of a retired Class-IV employee permissible in the absence of fraud or misrepresentation?

4. May an employer re-fix pay and withdraw erroneously granted benefits when the benefit was granted under a judicial order?

5. Does the pendency of a special leave petition before the Supreme Court justify rejection of an employee's claim for benefits?

6. Under what circumstances can recovery be effected from pension under Article 168-A of J&K Civil Services Regulations?

Cases Referred (2)

CENTRAL ADMINISTRATIVE TRIBUNAL
Ritu Tagore, J
1721/2022
Original Application