it2025_00543 — Recovery of excess amount paid due to incorrect fixation of pay is permissible after giving due notice to the employee, especially when the employee had given an undertaking to return the excess amount if the incorrect pay fixation is proved based on records

Recovery of excess amount paid due to incorrect fixation of pay is permissible after giving due notice to the employee, especially when the employee had given an undertaking to return the excess amount if the incorrect pay fixation is proved based on records — This chunk discusses the case T.A. No. 76 of 2009 (SCA/6241/02), in which the recovery of an excess amount paid due to incorrect pay fixation is addressed. The Applicant was a Scientist F in the Phys... — Facts: The Applicant was promoted as Scientist F in Physical Research Laboratory (PRY) by Order, dated 16-5-1997 and her pay was fixed at ₹ 5,250 per month in Fifth Pay Commission scales of pay with effect from 1-7-1997. When the Fifth Pay Commission scales of pay was introduced as on 1-1-1996, her pay was fixed at the stage of ₹ 13,500 in the pay scale of ₹ 12,000-16,500. After grant of her next increment on 1-1-1997 in Fifth Pay Commission scale of pay her pay was fixed at the stage of ₹ 13,875. Her pay as Scientist F was fixed at ₹ 14,700 in the scale of pay of ₹ 14,300-18,300 by Order, dated 11-12-1997. She superannuated from service on 31-3-1999. Audit pointed out that her pay should be fixed at the stage of ₹ 14,300 p.m. as on 1-7-1997; instead it was fixed as ₹ 14,700 p.m. with effect from 1-7-1997. Hence by Order, dated 3-7-2001 the Respondents refixed her pay on that basis and calculated pay, pension, commuted value of pension, gratuity and encashment of leave. The exact amount of excess paid to her as per above calculation was communicated to her by Letter, dated 9-7-2001. Considering her reply, dated 25-7-2001, the Respondents requested her to repay the excess amount paid failing which interest will be levied for that amount. But by another representation, she stated that her pay fixation of ₹ 14,700 as on 1-7-1997 is correct. That was considered and replied to her by Letter, dated 24-6-2002 sustaining the excess amount of ₹ 39,588 paid to her and stated that she can repay the excess amount in 12 instalments with simple interest of 12% from July, 2001. The main contention of the Applicant is that, her pay is correctly fixed referring to Fifth Pay Commission. She was issued notice of recovery after 3 1/2 years after her retirement which is gross delay, even if the error is accepted on face value. Interim order of stay is sought for in this OA. In the rejoinder she stressed that she is no way responsible for the error if any, committed in her pay fixation. The Respondents in their reply state that her pay fixation was done as per FR 22 (I)

(a) (1). The genuine mistake committed in her pay fixation is sought to be corrected by the recovery order. She cannot get herself enriched by protecting the money given to her by mistake. In fairness, she should refund the excess paid to her. The Tribunal considered the various submissions on both sides. The Order, dated 24-6-2002 refer to her undertaking to refund the excess, if any paid. That pleading is not taken by the Respondents but confirmed now when brought to their notice. It means that she approached the court without clean hands. In the case of M. Aligarh Muslim University and others v. Mansoor Ali Khan [ 2000 SCC (L&S) 965 ], it was held that "useless formality" theory would depend on the facts of a particular case. The fixation of pay under FR 22 (I)

(a) (1) in this case was done on 1-1-1996 when RS (RP) Rules does not arise. In 1999 her replacement scale of pay on Fifth Pay Commission was fixed, when the Applicant was not Scientist 'F' on 1-1-1996. Hence that fixation is contrary to rules. That error was reconsidered and notice is issued for recovery of excess paid. The Applicant placing reliance on five decisions of High Court of Gujarat submitted that she made no misrepresentation while fixing her pay as Scientist 'F'. Hence recovery is not warranted. The Tribunal analyzed the reasons given in those cases against recovery. The Tribunal also analyzed the reasons given in two Apex Court judgments referred to by Respondents for sustaining the recovery. The Full Bench of the Tribunal in the case of All India Postal Employees' Union, Postmen and Group 'D' v. U.O.I. [ 2005 (2) ATJ 193 ] after considering various issues answered that "in case the Applicants have given an undertaking that on refixation of their pay and scale, if any, excess amount is due and can be recovered, it can be recovered from them". Even though some other citations are quoted, it is not essential to analyze all of them. Coming to the facts of this case, it was held: