Recovery from employees for erroneous payments is impermissible under established judicial principles unless specific conditions are met.

$~1 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 17921/2024, CM APPLs. 76253/2024 & 76254/2024 UNION OF INDIA & ORS. .....Petitioner Through: Ms. Suruchi Mittal, Adv.

versus SHRI SIHOR RAM EX SSE GROUP C .....Respondent Through:

CORAM:

HON'BLE MR. JUSTICE C. HARI SHANKAR HON'BLE MR. JUSTICE AJAY DIGPAUL JUDGMENT (ORAL)

% 17.01.2025 C. HARI SHANKAR, J.

1. This is yet another case which is covered by the judgment of the Supreme Court in State of Punjab v Rafiq Masih , [(2015) 4 SCC 334] , and which has been dragged to this Court.

2. The respondent was appointed as Technician in the grade of ₹ 950-1500 on 15 October 1989. He was promoted as Fitter in the grade ₹ 1200-1800 w.e.f. 1 August 1996 and further as Junior Engineer in the grade of ₹ 5000-8000 w.e.f. 7 January 1998 and SSE in the grade of ₹ 6500-10500 w.e.f. 28 March 2008, which was further reversed to the Pay Band of ₹4600/-. He superannuated on 31 July 2018. At the time of fixation of his pension, his basic pay was reduced from ₹

Signature Not Verified

Digitally Signed By:AWJIT.P.(C) 17921/2024 Page 1 of 4

66,000/- as shown in the pay slip issued on 31 July 2018 to ₹ 64,100/-, without issuing him any show cause notice. This reduction was predicated on the ground that the pay of the respondent had been erroneously fixed on 7 January 1999 at ₹ 5150/- instead of ₹ 5000/-.

3. It is nobody’s case that the respondent was complicit or responsible in any way for the erroneous fixation of his pay in the grade of JE-II on 7 January 1999.

4. Consequent on the aforesaid re-fixation, an amount of ₹

1,87,083/- was recovered from his Death-cum-Retirement Gratuity.

5. Aggrieved thereby, the respondent approached the Central Administrative Tribunal, [“the Tribunal” hereinafter] by way of OA 2038/2020.

6. Following the judgment of the Supreme Court in Rafiq Masih the Tribunal has, by the impugned judgment dated 9 April 2024, allowed the OA and directed return of the recovery effected from the respondent.

7. The issue in controversy is no longer res integra. We need only refer to para 18 of the judgment in Rafiq Masih, which was subsequently followed by the Supreme Court in Thomas Daniel v State of Kerala , [2022 SCC OnLine SC 536]

Para 18 of Rafiq Masih Signature Not Verified

Digitally Signed By:AWJIT.P.(C) 17921/2024 Page 2 of 4

“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 Class 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.”

Para 9 of Thomas Daniel “9. This Court in a catena of decisions has consistently held that if the excess amount was not paid on account of any misrepresentation or fraud of the employee or 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