Recovery of excess pay barred after 5 years if due to departmental error, not employee fraud; revised fixation valid per rules.

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

Challenging the order passed by the learned Single Judge in W.P(MD)No.20081 of 2023, dated 31.07.2024, whereby the order of recovery as well as the revised pay fixation were set aside, the present Writ Appeal has been filed by the State.

2.The first respondent/writ petitioner retired as a Special Sub-

Inspector of Police in the year 2020. While he was serving as a Grade-I Constable, an incentive increment was erroneously granted to him in the year 2013. As per the applicable rules, he was not entitled to such incentive increment. Subsequently, after his 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 an order dated 08.10.2021 directing recovery of the excess amount paid. The said order was challenged in the Writ Petition.

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 petitioner prior to such refixation. The authorities were, however, directed to issue notice to the writ petitioner, afford him an opportunity to make his 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 was 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 petitioner submitted that the excess payment, if any, was not on account of any misrepresentation or fraud on the part of the writ petitioner, 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 petitioner, 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 petitioner cannot be faulted for the same. Therefore, the ratio laid down by the Hon’ble Supreme Court in White Washer's case (cited supra) squarely applies to the case of the first respondent/writ petitioner. Accor