Recovery of excess pay due to departmental error impermissible after 5 years, especially post-retirement; revised pay fixation upheld per rules.

[Judgment of the Court was made by N.SATHISH KUMAR, J.)

Challenging the orders passed by the learned Single Judge in W.P(MD)Nos.21711 of 2023, 23986 of 2023, 14092 of 2024 and 19750 of 2023 respectively, dated 31.07.2024, whereby the order of recovery as well as the revised pay fixation were set aside, the present Writ Appeals have been filed by the State.

2.The first respondent/writ petitioners in all Writ Petitions retired as Special Sub-Inspector of Police in the years 2020, 2021 and 2022 respectively. While they were serving as a Grade-I Constable, an incentive increment was erroneously granted to them in the year 2013. As per the applicable rules, they were not entitled to such incentive increment. Subsequently, after their retirement, it was noticed, based on the communication of the Accountant General, that the pay had been wrongly fixed. Consequently, the appellants passed proceedings revising the pay fixation and, thereafter, issued orders dated 22.08.2022, 20.03.2023, 18.05.2024 and 13.02.2023 respectively, directing recovery of the excess amount paid. The said orders were challenged in the Writ Petitions.

3.The learned Single Judge, relying upon the judgment of the Hon’ble Supreme Court of the India in the case of State of Punjab and others Vs. Rafiq Masih (White Washer) [2015 (4) SCC 334], held that since the recovery was sought to be made after a period of five years, the same is unsustainable and liable to be set aside. While setting aside the recovery, the learned Single Judge also set aside the revised fixation on the ground that no notice whatsoever was issued to the writ petitioners prior to such refixation. The authorities were, however, directed to issue notice to the writ petitioners, afford them an opportunity to make their submissions, and thereafter pass appropriate orders.

4.The learned counsel appearing for the appellants/State submitted that the grant of incentive increment to the first respondent/writ petitioners were contrary to the rules, and therefore, the authorities were well within their powers to revise the pay fixation. It is further submitted that the learned Single Judge erred in setting aside the revised fixation, as the same was carried out in accordance with the applicable rules based on the audit objection raised by the Accountant General. It is also contended that the direction to issue notice prior to refixation was unwarranted in the facts and circumstances of the case.

5.Per contra, the learned counsel appearing for the first respondent/writ petitioners submitted that the excess payment, if any, was not on account of any misrepresentation or fraud on the part of the writ petitioners, but solely due to an error committed by the department. It is further submitted that the recovery sought to be made after a lapse of several years, particularly after retirement, is impermissible in law, in view of the judgment of the Hon’ble Supreme Court in State of Punjab and others Vs. Rafiq Masih (White Washer) [2015 (4) SCC 334]. It is also contended that the revised fixation was effected without issuing any notice or affording an opportunity to the writ petitioners, thereby violating the principles of natural justice.

6.We have heard the learned counsel appearing on either side and perused the materials available on record.

7.Insofar as the recovery is concerned, we are of the view that the excess amount paid cannot be recovered after a period of five years, especially when the payment was not the result of any misrepresentation or fraud on the part of the employee. In the present case, the incentive increment was sanctioned by the employer on its own, and the writ petitioners c