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Judgment
(PER : NIVEDITA P. MEHTA, J.)
Rule. Rule made returnable forthwith. Heard finally by the consent of the learned counsel for the respective parties.
By the present writ petition, the petitioner seeks to quash and set aside the order dated 08.07.2025 passed by the Deputy Chief Accounts and Finance Officer, Zilla Parishad, Gadchiroli, and further seeks a direction to respondent No. 3 to refund the amount of Rs. 3,70,048/-recovered from his pensionary benefits, along with applicable interest, in accordance with law.
Succinctly, the case of the petitioner is that he was an employee of respondent – Zilla Parishad and retired from service on superannuation on 30.06.2025. The petitioner was initially appointed to the post of Laboratory Technician under respondent No. 2 and, during his service tenure, was transferred to various places. As per the Government Resolution dated 29.06.2001, no promotional posts were available in the cadre in which the petitioner was working under the Public Health Service. Thereafter, another Government Resolution dated 06.08.2002 was issued, which contemplated the grant of a higher pay scale of Rs. 6,500-200-10,500 as a one-step promotion to officers who were Science graduates with Biology. Accordingly, the Health Department of respondent No. 2 granted the said benefit to the petitioner in the year 2004. However, upon his retirement, the respondent authorities directed recovery of Rs.3,70,048/- from his retiral benefits on the ground that the benefit extended pursuant to the aforesaid Government Resolution had resulted in excess payment. The petitioner has, therefore, challenged the said recovery.
The impugned order dated 08.07.2025 directed recovery of an amount of Rs.3,70,048/- from the retirement gratuity payable to the petitioner on account of excess payment arising out of pay fixation for the period from 01.07.2002 to 31.12.2015. The order records the total retirement gratuity payable to the petitioner as Rs.11,13,750/-, and deducts the aforesaid amount towards recovery and determines the net gratuity payable at Rs.7,43,702/-. The said recovery has been ordered on the ground that the petitioner was erroneously extended the benefit of the Government Resolution dated 06.08.2002 while fixing his pay.
The petitioner thereafter made a representation dated 24.07.2025, contending that the recovery was contrary to the Circular dated 10.08.2020 issued by respondent No.1, which relied upon the judgment of the Hon’ble Supreme Court in State of Punjab and Ors. v. Rafiq Masih (White Washer) and Ors., reported in AIR 2015 SC 696. According to him, the said judgment prohibits recovery of excess payments inadvertently made to employees belonging to Class-III and Class-IV Cadre in the circumstances specified therein. He further contends that the recovery is impermissible, particularly as it was sought to be effected upon his retirement, after he had rendered the entire length of service without any misrepresentation or fault on his part. It is his case that the excess payment arose solely due to an erroneous pay fixation by the authorities and that recovery of the amount from his retiral benefits, at the fag end of his service, is contrary to the principles laid down by the Hon’ble Supreme Court. The petitioner also submits that respondent Nos.2 and 3 failed to consider his representation and proceeded with the recovery of Rs.3,70,048/-from his retiral benefits. Aggrieved thereby, the petitioner has approached this Court seeking the reliefs as prayed for.
Mr. Ganesh Khanzode, learned counsel for the petitioner submits that respondent No. 3 has arbitrarily recovered the amount of the alleged excess payment from the retirement benefits of the petitioner, which could not have been done in view of the judgment of the Hon’ble Apex Court in Rafiq Masih (supra). The learned counsel further submits that the petitioner was not at fault for the excess payment, as he had neither made any misrepresentation nor played any fraud to obtain the said amount. The learned counsel further submits that the petitioner was never issued any notice regarding the alleged excess payment and, therefore, the action of the respondents in recovering the amount of Rs. 3,70,048/- is illegal. He further submits that the action of respondent No. 3 is also contrary to the directions contained in the Circular dated 10.08.2020 issued by the State of Maharashtra. He concludes by submitting that the law laid down by the Hon’ble Apex Court in Rafiq Masih (supra) is binding on the respondents, who have failed to adhere to the same, and, therefore, the reliefs sought in the petition deserve to be granted.
Per contra, Ms. Munshi, learned counsel appearing for respondent No. 3, submits that, at the time of retirement of the petitioner, verification of his salary for the period from 01.07.2002 to 15.12.2015 was undertaken, during which it was found that excess payment had been made on account of incorrect pay fixation. Upon verification of the pay scale under the 7th Pay Commission, it was noticed that, under the 5th Pay Commission, the petitioner had been granted the pay scale of Rs.6,500-200-10,500, resulting in excess payment. It is submitted that the petitioner had inadvertently been granted a higher pay scale by treating the same as a one-step promotion, which constituted an irregularity in pay fixation. Consequently, the excess amount was recovered from the petitioner's retirement benefits pursuant to the order dated 08.07.2025 issued by the Deputy Chief Accounts and Finance Officer.
Learned counsel further submits that the petitioner had voluntarily furnished an undertaking and bond dated 01.01.2025, agreeing to refund any excess payment detected subsequently on account of discrepancies or incorrect pay fixation, or to permit adjustment of such amount against future payments due to him. In view of the said undertaking, it is contended that the law laid down by the Hon'ble Supreme Court in Rafiq Masih (supra), would not apply to the petitioner's case. Reliance is placed on the judgment of the Hon'ble Supreme Court in High Court of Punjab and Haryana and Others v. Jagdev Singh, (2016) 14 SCC 267.
In response, the learned counsel for the petitioner submitted that he was not aware of any such undertaking furnished by the petitioner. He further submitted that, even assuming that the petitioner had furnished such an undertaking, the same was given as a matter of routine procedure and could not be said to have been furnished voluntarily. This submission, in our view, is not convincing and cannot be accepted. We had also called upon the parties to consider the recent judgment of the Hon’ble Supreme Court in Civil Appeal Nos. 8329–8336 of 2016, in the case of Dr. M.K. Ravi Varma and Others v. National Institute of Technology and Others, reported in 2026 INSC 1080. The learned counsel for the petitioner submitted that the aforesaid judgment is applicable to the Class I cadre and not to the petitioner’s case, as petitioner belongs to Class III and Class IV.
The learned Assistant Government Pleader, appearing for Respondent Nos. 1 and 2 adopted the submissions made by the learned counsel appearing for respondent No.3.
We have heard the learned counsel for the respective parties. The question of recovery will have to be considered in the context of the factual matrix, and no straightjacket formula can be prescribed. The petitioner, to whom excess payment was made, had executed an undertaking whereby he was put on notice that any amount found to have been paid in excess would be required to be refunded. The petitioner is, therefore, bound by the said undertaking. The action of the respondents in taking steps to recover the excess amount paid cannot be termed harsh or arbitrary. The absence of fraud or misrepresentation on the part of the petitioner does not preclude the employer from recovering the excess amount paid.
This is a case where the amount paid in excess from public funds is liable to be recovered in accordance with law. The respondents have relied upon the undertaking and bond dated 01.01.2025 furnished by the petitioner. The relevant portion of the undertaking and bond reads as under :-
The Hon’ble Supreme Court in the case of Chandi Prasad Uniyal and Ors Vs. State of Uttarakhand and Ors., reported in (2012) 8 SCC 417 observed in paragraph No. 14 which reads thus :-
“14.We are concerned with the excess payment of public money which is often described as “tax payers money” which belongs neither to the officers who have effected overpayment nor to the recipients. We fail to see why the concept of fraud or misrepresentation is being brought in such situations. The question to be asked is whether excess money has been paid or not, may be due to a bona fide mistake. Possibly, effecting excess payment of public money by the Government officers may be due to various reasons like negligence, carelessness, collusion, favouritism etc. because money in such situation does not belong to the payer or the payee. Situations may also arise where both the payer and the payee are at fault, then the mistake is mutual. Payments are being effected in many situations without any authority of law and payments have been received by the recipients also without any authority of law. Any amount paid/received without authority of law can always be recovered barring few exceptions of extreme hardships but not as a matter of right, in such situations law implies an obligation on the payee to repay the money, otherwise it would amount to unjust enrichment.”
Further, in Dr. M.K. Ravi Varma and Others (supra), the Hon’ble Supreme Court considered the issue of recovery of excess payments made to employees on account of inadvertent errors, particularly in the light of undertakings furnished by the employees and the plea of hardship arising from such recovery. The Hon’ble Supreme Court, in paragraphs 20 and 24 of the said judgment, observed as follows:
“20.It is, therefore, clear that a mistake was committed in extending financial benefits to the appellants; and this was immediately withdrawn upon detection of such mistake. Such recovery of the amounts paid by mistake to the appellants, in view of the undertakings given by them, did not warrant interference by the Single Judge in exercise of writ jurisdiction and the Division Bench appears to be right in its interdiction.
24.Insofar as the circumstance of hardship canvassed by learned counsel for the appellants is concerned, we need to observe that no such case had been pleaded in the writ petition. In any event, whether recovery of money would result in hardship has to be determined on the facts of each particular case. After all, we cannot presently conceive of a situation where recovery of money from the recipient would not cause hardship. However, for instance, if it is pleaded and proved to the satisfaction of the writ court that entirety of the excess payment received by the employee has since been spent towards medical treatment and that the employee concerned would face immense hardship in returning such excess payment, or if the same were recovered from him through initiation of appropriate proceedings, in a deserving case the Court would be justified in quashing the notice seeking recovery or refund. This would also be subject to the employee satisfying the Court that the excess payment was not received on account of any misrepresentation or fraud on his part. Since no such case exists here, the contention is rejected.
Furthermore, the contention of the learned counsel for the petitioner that the judgment in Dr. M.K. Ravi Varma and Others (supra) is applicable to the Class I cadre only, does not find favour with this Court. The said submission proceeds on an incorrect reading of the judgment. The Hon’ble Supreme Court has not confined the principles enunciated therein exclusively to employees belonging to Class I cadre. The applicability of the decision cannot be determined solely on the basis of the cadre classification of the employees. The judgment, inter alia, considers the effect of an undertaking furnished by an employee agreeing to refund excess payments and the requirement of pleading and establishing hardship warranting interference with recovery. In the present case, the petitioner had furnished an undertaking agreeing to refund any excess payment detected on account of incorrect pay fixation. Further, the petitioner has neither pleaded nor placed any material on record to establish exceptional hardship arising from the recovery. Therefore, the mere assertion that the petitioner belongs to Class III or Class IV Cadre does not, by itself, render the aforesaid judgment inapplicable to the facts of the present case. Therefore, in view of the ratio laid down by the Hon'ble Apex Court in the aforesaid judgment, we are of the considered view that the excess payment recovered is squarely covered by the undertaking, whereby the signatory, i.e., the petitioner, promises to return the excess amount. Further, we are of the view that the petitioner has no vested right to the amount paid to him in excess of what he was otherwise entitled to. Public money wrongly paid should be recovered and in absence of pleading of hardship, it is made to understand that no hardship has been caused to the petitioner by the said recovery proceedings.
It is also pertinent to mention here that any amount received without the authority of law can always be recovered, barring few exceptions of extreme hardships, but not as a matter of right and in such situation law implies an obligation on the payee to repay the money, otherwise it would amount to unjust enrichment. The writ petition is dismissed accordingly. Rule stands discharged. No order as to costs.