Case Background
The case arose from a dispute between a retired employee of the Labour Welfare Organisation and the Union of India through officials of the Ministry of Labour and Employment.
The employee had approached the Central Administrative Tribunal, Patna Bench, by filing O.A. No. 78 of 2018. He complained that even after three years of his superannuation, his complete retiral dues had not been released.
Before the Tribunal, he sought directions for payment of cash equivalent to earned leave, group insurance, and medical allowance at the rate of Rs.500 per month. He also claimed 12 percent interest for the delay in releasing these amounts.
He asserted that there was no valid reason for withholding his dues and that he had not been given any notice about recovery of any amount on the ground of alleged wrong fixation of his pay-scale or grade pay.
On the other side, the Union of India, in its written statement before the Tribunal, admitted that excess payment had been made but explained that this happened because of incorrect fixation of grade pay when various financial upgradations were granted.
According to the Union of India, the employee had been wrongly allowed grade pay of Rs.4600 instead of Rs.4200 upon grant of the first Assured Career Progression (ACP), Rs.4800 instead of Rs.4600 upon the second ACP, and Rs.5400 instead of Rs.4800 on grant of Modified Assured Career Progression (MACP), ignoring the fact that the first ACP had already upgraded his pay from Rs.2800 to Rs.4200.
The authorities recovered the amount which, according to them, was paid in excess on account of these errors. This recovery was made from the employee’s retiral dues.
The Central Administrative Tribunal, relying on the Supreme Court decision in State of Punjab v. Rafiq Masih (White Washer) and others, (2015) 4 SCC 334, allowed the employee’s application. It directed the authorities to refund all amounts recovered from his retiral dues within three months.
The Union of India then approached the Patna High Court under Article 226 of the Constitution, filing Civil Writ Jurisdiction Case No.12844 of 2021, to challenge and quash the Tribunal’s order dated 17.01.2020.
What the Court Examined and Decided
The Division Bench of the Patna High Court, consisting of Hon’ble Mr. Justice Chakradhari Sharan Singh and Hon’ble Mr. Justice Madhuresh Prasad, heard the writ petition. The oral judgment was delivered on 20.12.2021.
The central question before the Court was whether, in the presence of a clear written undertaking by the employee, the authorities were barred from recovering excess payments in view of the Supreme Court’s judgment in Rafiq Masih.
The Union of India relied heavily on an undertaking signed by the employee at the time of fixation of his ACP/MACP benefits. In that undertaking, the employee clearly recorded that any excess payment found to have been made as a result of incorrect fixation, or any excess payment detected later, would be refunded by him to the Government, either by adjustment against further payments or otherwise.
On behalf of the Union of India, it was argued that the Tribunal failed to consider this undertaking and that the case was therefore covered by the later Supreme Court judgment in High Court of Punjab & Haryana v. Jagdev Singh, (2016) 14 SCC 267. In Jagdev Singh, the Supreme Court held that where an employee has given a specific undertaking agreeing to refund excess payment, he is bound by that undertaking and recovery can be made.
The Union of India submitted that, because of this undertaking, the employee could not legally object to the recovery of the excess amount that had been paid due to wrong fixation of pay.
On behalf of the employee, counsel defended the Tribunal’s order. He argued that the Tribunal was right in applying the principles laid down in Rafiq Masih, especially considering the employee’s advanced age and the hardship he was facing after retirement.
The employee’s counsel also referred to a Division Bench judgment of the Patna High Court in Shobha Kant Mishra v. Union of India & Ors., reported in 2021 (4) BLJ 423. He said that in that case, despite there being a similar undertaking, the Court had restrained a Bank from making further recovery of excess payment from a retired employee.
Additionally, he cited a Division Bench decision of the Telangana High Court in Union of India v. A. Sreedhar, AIRONLINE 2020 TEL 213, where the High Court restrained the authorities from recovering further amounts that had admittedly been paid in excess of entitlement.
Counsel for the employee urged that if the Union of India was not directed to refund the amount already recovered, the employee would suffer serious and undue hardship, especially because there was no allegation of any fraud or misrepresentation by him in getting the higher pay.
After examining the pleadings and submissions, the Patna High Court first noted an undisputed fact: the employee had indeed been paid more than his legal entitlement due to incorrect fixation of pay at the time of ACP/MACP. It was equally undisputed that this excess amount had already been recovered by the authorities.
The Court also recorded that the existence of the employee’s written undertaking was not in dispute. This became the key turning point in the case.
The Bench then turned to the Supreme Court’s judgment in Jagdev Singh. In particular, it relied on paragraph 11 of that decision, where the Supreme Court clearly distinguished cases covered by the protective principles of Rafiq Masih from cases where an employee had specifically agreed in writing to refund any excess amounts paid.
The extract quoted by the Patna High Court from Jagdev Singh stated that the principle that recovery should not ordinarily be made from employees (as set out in proposition (ii) of Rafiq Masih) does not apply when the officer was clearly put on notice that excess payment, if found, would be refundable, and when he had furnished an undertaking while opting for a revised pay scale. In such a case, he is bound by the undertaking.
Applying this reasoning, the Patna High Court held that the employee’s case fell squarely within the category dealt with in Jagdev Singh, not within the protective umbrella of Rafiq Masih. Because the employee had voluntarily signed an undertaking to refund any excess payment, he could not later claim that the recovery was illegal.
The Court then examined the Patna High Court’s own earlier Division Bench judgment in Shobha Kant Mishra, relied upon by the employee. It held that this precedent did not help the employee’s case.
In Shobha Kant Mishra, the excess amount had been wrongly credited into the petitioner’s bank account by the Bank itself, and the Court, to balance equities, merely restrained the Bank from making any further recovery. Importantly, the Court in that case had also clearly observed that to the extent recovery had already been made from the monthly pension of that petitioner, that recovered amount would not be refunded.
On these facts, the Division Bench concluded that Shobha Kant Mishra was distinguishable and could not be used to justify a direction to refund the excess amount that had been recovered from the present employee.
After this analysis, the Patna High Court held that the Tribunal’s order directing refund of the recovered amount was unsustainable and deserved interference. The Tribunal had failed to consider the binding undertaking and the law laid down in Jagdev Singh.
Accordingly, the High Court set aside the Tribunal’s order dated 17.01.2020 in O.A. No. OA/050/00078/2018. The writ application filed by the Union of India was allowed. The Court did not pass any order as to costs.
Why This Judgment Matters
This judgment is significant for government employees and pensioners who have received higher salary or benefits because of wrong pay fixation and have also signed undertakings at the time of availing revised pay or ACP/MACP benefits.
The Patna High Court has made it clear that where there is a clear written undertaking to refund any excess amount, the protection normally available under the Supreme Court’s decision in Rafiq Masih may not apply. In such cases, the government can lawfully recover excess payments, even from retiral dues.
For employees, this means that the contents of undertakings signed during service are crucial. Signing such an undertaking can later permit recovery, even if the error was entirely on the side of the department and even if the employee did not commit any fraud or misrepresentation.
For departments, the judgment reinforces that they must act within the framework set by the Supreme Court. If they have obtained such undertakings and excess payments are discovered, recovery made on that basis is likely to be upheld by courts.
Legal Issues and Answers
- Issue: Can a retired employee, who has given a written undertaking to refund any excess payment due to wrong fixation of pay, prevent the government from recovering such excess amounts by relying on the Supreme Court’s judgment in Rafiq Masih?
Answer: No. The Patna High Court held that in the presence of a clear undertaking, the case is governed by the Supreme Court’s decision in Jagdev Singh. The employee is bound by his undertaking, and recovery already made of the excess amount is valid. - Issue: Was the Central Administrative Tribunal justified in directing the authorities to refund the amount recovered from the employee’s retiral dues?
Answer: No. The Court held that the Tribunal overlooked the undertaking and the binding precedent of Jagdev Singh, and therefore its direction to refund the recovered amount could not stand and was set aside.
Cases Cited by the Court
- State of Punjab v. Rafiq Masih (White Washer) and others, (2015) 4 SCC 334 – relied upon by the Tribunal and discussed before the High Court.
- High Court of Punjab & Haryana v. Jagdev Singh, (2016) 14 SCC 267 – applied by the Patna High Court as the governing precedent.
- Shobha Kant Mishra v. Union of India & Ors., 2021 (4) BLJ 423 – cited by the employee; distinguished by the Court.
- Union of India v. A. Sreedhar, AIRONLINE 2020 TEL 213 – cited by the employee; noted in submissions.
Case Details
Case Number: Civil Writ Jurisdiction Case No.12844 of 2021
Case Title: The Union of India & Ors. v. Sri Bijoy Kumar
Citation: 2022 (4) PLJR 182
Coram: Hon’ble Mr. Justice Chakradhari Sharan Singh; Hon’ble Mr. Justice Madhuresh Prasad
Date of Judgment: 20.12.2021
Advocates: For the petitioners (Union of India and officials of Ministry of Labour and Employment): Mr. Pradeep Kumar, C.G.C.; Mr. Kumar Sachin, C.G.C. For the respondent (retired employee): Mr. Prince Kumar Mishra, Advocate.
Nature of the Case: Writ petition under Article 226 of the Constitution of India challenging an order of the Central Administrative Tribunal, Patna Bench, in O.A. No. 78 of 2018.
Link to Judgment: View full judgment on Patna High Court website
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