IN THE HIGH COURT OF JUDICATURE AT PATNA

Civil Writ Jurisdiction Case No. 19257 of 2025

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1.The Union of India through the Secretary, Ministry of Railways,

Government of India, Rail Bhawan, New Delhi- 110001.

2.The General Manager, East Central Railway, Hajipur P.O.- Digghi Kalan,

P.S.- Hajipur (Sadar), District- Vaishali, Pin Code- 844101 (Bihar).

3.The General Manager (Personnel), East Central Railway, Hajipur P.O.-

Digghi Kalan, P.S.-Hajipur (Sadar), Dist.-Vaishali, Pin -844101 (Bihar).

4.The Divisional Railway Manager, East Central Railway, Danapur, District-

Patna, Pin Code- 801105 (Bihar).

5.The Senior Divisional Personnel Officer, East Central Railway, Danapur,

District- Patna, Pin Code 801105 (Bihar).

6.The Senior Divisional Financial Manager, East Central Railway, Danapur,

District- Patna, Pin Code 801105 (Bihar).

... ... Petitioner/s

Versus

Anil Kumar Sinha Son of Late Sheo Nandan Prasad, resident of Ram Nagar

Bengali Tola, P.S.- Jakkanpur, District- Patna - 800001 (Bihar).

... ... Respondent/s

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Appearance:

For the Petitioner/s: Mr. Rajen Sahay, Advocate

For the Respondent/s: Mr.

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CORAM: HONOURABLE MR. JUSTICE MOHIT KUMAR SHAH

and

HONOURABLE MR. JUSTICE SHAILENDRA SINGH

ORAL JUDGMENT

(Per: HONOURABLE MR. JUSTICE MOHIT KUMAR SHAH)

Date: 22-01-2026

The present writ petition has been filed against the order

dated 31.01.2025, passed by the Ld. Central Administrative

Tribunal, Patna Bench, Patna (hereinafter referred to as the ‘Ld.

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CAT’) in O.A. No. 050/00764/2023, whereby and whereunder

while disposing off the original application filed by the

respondent herein, the order of recovery dated 18.02.2022 along

with the order dated 23.09.2021 read with the order dated

30.11.2018 have been quashed and the petitioners have been

directed to forthwith refund the amount already recovered. The

Ld. CAT, while setting aside the aforesaid orders dated

30.11.2018, 23.9.2021 and 18.2.2022, whereby the pay-scale of

the respondent has been re-fixed, has also directed the

petitioners to pass a reasoned and a speaking order regarding re-

fixation of pay of the respondent within three months in view of

the precedents as also considering the Railway Rules.

2.The brief facts of the case as averred in the original

application filed by the respondent herein is that while he was

working as Loco Pilot (Goods) in the pay-scale of Rs. 5500 -

Rs. 9000/-, he was promoted to the post of Chief Loco

Inspector-cum-Safety Counsellor in the pay-scale of Rs. 6500-

Rs.10,500/- with effect from 01.04.2004, after being found

suitable in the selection test conducted by the petitioner no. 5,

whereafter he was posted under Senior Divisional Safety

Officer, East Central Railway, Danapur vide order dated

22.06.2004 as also his pay was fixed on promotion with effect

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from 01.04.2004. The respondent had then drawn annual

increments and all other benefits since 01.04.2004 till the month

of September, 2020 and his basic pay had reached a sum of Rs.

99,800/- which also included the effect of revision of pay-scale

from time to time on account of implementation of the various

recommendations of the Central Pay Commission, after due

vetting by the Accounts Department. However, it is the case of

the respondent that when he received the pay slip for the month

of October, 2020, he found that his basic pay had been revised

from a sum of Rs. 99,800/- to Rs. 86,100/- without the

petitioners having passed any adverse order regarding reduction

of pay-scale of the respondent. The respondent had then

submitted a representation dated 24.11.2020 against the said

reduction of pay, however neither any order was passed on the

same nor he was communicated about the reasons for reducing

his pay after 16 years, leading to the respondent filing an

original application bearing O.A. No. 325 of 2021, which was

dismissed as not pressed by an order dt. 09.07.2021, passed by

the Ld. CAT, while recording the submission of the respondent

that he wants to file a fresh representation.

3.The respondent had again submitted a representation on

22.07.2021, however he received a show cause dated 23.9.2021

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along with an order dated 30.11.2018, re-fixing the pay scale of

the respondent with effect from 01.04.2004, wherein it had been

stated that since his pay has wrongly been fixed with effect from

the year 2004, the department has assessed that a sum of Rs.

17,65,430/- is required to be recovered from him on account of

over payment made to him, hence he may submit his show

cause reply within 15 days. The respondent had then filed his

reply to the aforesaid show cause notice on 06.10.2021, inter-

alia stating therein that his pay has been correctly fixed as on

01.04.2004 and the pay scale of similarly situated employees

has not been reduced, apart from reference having been made to

the Circular of the Railway Board dated 22.06.2016 issued in

light of DoPT’s OM dated 02.03.2016, based on the judgment of

the Hon’ble Apex Court rendered in the case of Rafiq Masih

which restrains recovery of any over payment made beyond five

years of the date of alleged wrong fixation of pay. Nonetheless,

without passing any order upon the reply submitted by the

respondent on 6.10.2021, the petitioners started making

recovery @ of Rs. 15000/- per month leading to the respondent

having filed yet another Original Application bearing O.A. No.

608 of 2021, which was disposed off by the learned CAT by an

order dated 15.11.2021 directing the petitioners to take a

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decision on the representation of the respondent at the earliest

and till then the recovery was stayed.

4.It is the further case of the respondent herein that despite

the order of the Ld. CAT dt. 15.11.2021, the petitioners neither

stopped recovery being made from the salary of the respondent

nor disposed off the representation filed by the respondent

leading to the respondent filing a contempt petition bearing

CCPA No. 02 of 2023, alleging therein non-compliance of the

orders of Ld. CAT dated 15.11.2021, as corrected vide order

dated 30.05.2022. In the show cause filed by the petitioners

before the Ld. CAT a communication dt. 21.2.2022 containing

speaking order dated 18.02.2022, passed by the petitioner no. 5

was brought on record, whereby and whereunder the

representation of the respondent had been rejected holding that

the decision to re-fix the pay of the respondent and make

recovery of the excess amount paid is correct and justified. The

respondent had challenged the aforesaid orders dated 18.2.2022

read with order dated 23.09.2021 and 30.11.2018, whereby and

whereunder the basic pay of the respondent has been reduced

and a sum of Rs. 17,65,430/- has been sought to be recovered

from the monthly salary of the respondent by filing O.A. No.

050/00764/2023. The respondent had also prayed before the Ld.

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CAT to restore his basic pay to the tune of Rs. 99,800/- with

effect from the month of October, 2020, which has been reduced

to Rs. 86,100/- and refund the amount already deducted from his

monthly salary.

5.The petitioners had filed written statement before the

learned CAT wherein it has been stated that the respondent is

working as CLI/Safety Counselor at Danapur and earlier his pay

fixation was done upon promotion as follows- “current Basic

pay + 30% of Current Basic Pay + DA + Promotion increment”

while it should have been computed as follows – “current Basic

pay + 30% of Current Basic pay + Promotion increment, as per

the existing rule. Subsequently, it was detected that DA was not

admissible, hence it ought not to have been added while fixing

pay upon promotion earlier, hence pay fixation was corrected

and the respondent was advised accordingly. It is further stated

that upon examination, it was found that the pay of the

respondent had been wrongly fixed w.e.f. 01.04.2004 itself.

Thus, corrective measures were taken and fresh pay fixation was

done on 30.11.2018 which is correct and in conformity of the

rules. Accordingly, the respondent was informed about

deduction vide office letter no. Estt./Pay fixation/Supervisor/20-

21, Danapur dated 23.09.2021. The petitioners have also stated

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in the written statement that the representation of the respondent

was disposed off by a speaking order dated 18.02.2022 and the

Circular of the Railway Board dated 22.06.2016, being relied

upon by the respondent, is not relevant in the present case since

the respondent will retire in the year 2026.

6.We find from the records that it had been submitted on

behalf of the respondent before the learned CAT that the orders

dated 18.02.2022, 23.09.2021 and 30.11.2018. pertaining to the

reduction of basic pay and recovery of the over payment made

are illegal and unjust as also against the law laid down by the

Hon’ble Apex Court in the case of State of Punjab & Ors. vs.

Rafiq Masih, reported in (2015) 4 SCC 334. It was further

argued on behalf of the respondent before the learned CAT that

the pay scale of similarly placed employees, promoted either

before 01.04.2004 or even thereafter but before the year 2007,

has neither been reduced nor any adverse order has been passed

against such employees. In this connection, reliance was placed

on a judgment dated 18.10.2022, passed by this Court in LPA

No. 431 of 2021 (Surendra Mandal & Ors. vs. The State of

Bihar & Ors.) as also upon the judgment rendered by the

Hon’ble Apex Court in the case of Thomas Daniel vs. State of

Kerala and Others, reported in (2022) SCC online SC 536.

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7.The learned counsel for the petitioners herein has raised a

challenge to the impugned order dated 31.01.2025 to the extent

the Ld. CAT has quashed the order of recovery sought to be

made from the monthly salary of the respondent, though the

issue regarding re-fixation of pay has been remanded back to the

petitioners’-authorities, who have been directed to pass a

reasoned and a speaking order within three months. As far as the

order of recovery is concerned, the learned counsel for the

petitioners submits that firstly there is no infirmity in the

assessment of the amount to be recovered from the respondent

to the tune of Rs. 17,65,430/- and moreover, the petitioners are

well within their right to make recovery as per the provisions

contained in Rule 15 (1) (2) & 4 (i) (b) of the Railway Services

(Pension) Rules, 1993 pertaining to recovery and adjustment of

government or railway dues such as over payment, from

pensionary benefits.

8.The learned counsel for the petitioners has also referred to

the following judgments:-

(i) Judgment rendered by the Hon’ble Apex Court in the

case of Raj Kumar Batra vs. The State of Haryana,

reported in (1992) 1 SCT 129;

(ii) Judgment rendered by the Hon’ble Apex Court in the

case of G. Srinivas vs. Govt. of Andhra Pradesh & Ors,

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reported in (2005) 13 SCC 712;

(iii) Order dated 17.08.2012 passed by the Hon’ble Apex

Court in Civil Appeal No. 5899 of 2012, arising out of

SLP(c) No. 30858 of 2011 (Chandi Prasad Uniyal & Ors.

vs. State of Uttarakhand & Ors.), reported in (2012) 8

SCC 417 and,

(iv)

Judgment rendered by the Hon’ble Apex Court in the

case of High Court of Punjab & Haryana vs. Jagdev

Singh, reported in (2016) 14 SCC 267.

9.The Ld. counsel for the petitioners has also submitted that

recovery of monetary benefits wrongly extended to the

employees, can only be interfered with, in cases where such

recovery would result in a hardship, however in the present case

more than five years of service was remaining at the time of

assessment of the amount to be recovered from the respondent,

hence the action of recovery would have caused no hardship to

the respondent, thus the law laid down by the Hon’ble Apex

Court in the case of Rafiq Masih (supra) is not applicable in the

facts and circumstances of the present case.

10.Having heard the learned counsel for the parties and

having gone through the pleadings on record, we find that the

issue regarding re-fixation of pay scale of the respondent with

effect from the year 2004, leading to reduction of his pay scale

from Rs. 99800/- to Rs. 86100/- with effect from the month of

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October, 2020 has been remanded back to the petitioners for

reconsideration in light of the Railway Rules and in view of the

precedents, by way of re-fixation of the pay scale of other

similarly situated employees, hence this aspect of the matter has

not been seriously questioned, obviously for the reason that the

said observation/direction of the Ld. CAT is not against the

petitioners, however the setting aside of the order of recovery by

the Ld. CAT has been vehemently contested, as aforesaid. Thus,

the only issue to be adjudicated in the present writ petition is as

to whether recovery of the excess amount paid to the respondent

on account of wrong fixation of his pay scale is permissible or

not. We find that the issue of entitlement of the employer to

recover the amount paid in excess to the employee without any

fault of the employee has been settled in a host of decisions by

the Hon’ble Apex Court. The law in this regard is no longer res

integra and we would gainfully refer to a catena of judgments

rendered by the Hon’ble Apex Court on the issue that recovery

of the amount paid in excess to the employee by the employers,

even in a case like the present one, is impermissible under the

law. For ready reference we deem it fit and proper to refer to the

following Judgments rendered by the Hon’ble Apex Court:-

(i). Judgment rendered in the case of Syed Abdul Qadir

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vs. State of Bihar, reported in (2009) 3 SCC 475;

(ii). Judgment rendered in the case of Shyam Babu

Verma vs. Union of India, reported in (1994)2 SCC 52;

(iii). Judgment rendered in the case of Sahib Ram vs.

State of Haryana, reported in (1995) Suppl.1 SCC 80;

(iv). Judgment rendered in the case of B.Ganga Ram vs.

Regional Joint Director, reported in (1997) 6 SCC 139;

(v). Judgment rendered in the case of Purshottam Lal

Das vs. State of Bihar, reported in (2006) 11 SCC 492;

(vi). Judgment rendered in the case of Bihar State

Electricity Board vs. Bijay Bhadur, reported in (2000)

10 SCC 99;

(vii). Judgment rendered in the case of B.J. Akkara vs.

Govt. of India University, reported in (2006) 11SCC 709;

(viii). Judgment rendered in the case of State of Punjab

vs. Rafique Masih, reported in (2015) 4 SCC 334;

(ix). Judgment rendered in the case of Thomas Daniel vs.

State of Kerala and Others, reported in (2022) SCC

Online SCC 536;

11.At this juncture, it would be relevant to reproduce

paragraphs no. 3 to 18 of the judgment rendered by the Hon’ble

Apex Court in the case of Rafiq Masih (supra) herein below:-

“3. The issue that we have been required to adjudicate is,

whether all the private respondents, against whom an

order of recovery (of the excess amount) has been made,

should be exempted in law, from the reimbursement of the

same to the employer. For the applicability of the instant

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order, and the conclusions recorded by us hereinafter, the

ingredients depicted in the foregoing two paragraphs are

essentially indispensable.

4. Merely on account of the fact that the release of these

monetary benefits was based on a mistaken belief at the

hands of the employer, and further, because the

employees had no role in the determination of the

employer, could it be legally feasible, for the private

respondents to assert that they should be exempted from

refunding the excess amount received by them? Insofar as

the above issue is concerned, it is necessary to keep in

mind, that the following reference was made by a

Division Bench [Rakesh Kumar v. State of Haryana,

(2014) 8 SCC 892] of two Judges of this Court, for

consideration by a larger Bench:

“2. In view of an apparent difference of views

expressed on the one hand in Shyam Babu Verma v.

Union of India [(1994) 2 SCC 521] and Sahib Ram v.

State of Haryana [1995 Supp (1) SCC 18]; and on the

other hand in Chandi Prasad Uniyal v. State of

Uttarakhand [(2012) 8 SCC 417], we are of the view

that the remaining special leave petitions should be

placed before a Bench of three Judges. The Registry is

accordingly directed to place the file of the remaining

special leave petitions before the Hon'ble the Chief

Justice of India for taking instructions for the

constitution of a Bench of three Judges, to adjudicate

upon the present controversy.”

5. The aforesaid reference was answered by a Division

Bench of three Judges on 8-7-2014. While disposing of

the reference, the three-Judge [State of Punjab v. Rafiq

Masih, (2014) 8 SCC 883] Division Bench, recorded the

following observations in para 6:

“6. In our considered view, the observations made by

the Court not to recover the excess amount paid to the

appellant therein were in exercise of its extraordinary

powers under Article 142 of the Constitution of India

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which vest the power in this Court to pass equitable

orders in the ends of justice.”

Having recorded the above observations, the reference

was answered as under:

“13. Therefore, in our opinion, the decisions of the

Court based on different scales of Article 136 and

Article 142 of the Constitution of India cannot be best

weighed on the same grounds of reasoning and thus in

view of the aforesaid discussion, there is no conflict in

the views expressed in the first two judgments [Shyam

Babu Verma v. Union of India, (1994) 2 SCC 521],

[Sahib Ram v. State of Haryana, 1995 Supp (1) SCC

18] and the latter judgment [Chandi Prasad Uniyal v.

State of Uttarakhand, (2012) 8 SCC 417].

14. In that view of the above, we are of the considered

opinion that reference was unnecessary. Therefore,

without answering the reference, we send back the

matters to the Division Bench for their appropriate

disposal.”

6. In view of the conclusions extracted hereinabove, it

will be our endeavour, to lay down the parameters of fact

situations, wherein employees, who are beneficiaries of

wrongful monetary gains at the hands of the employer,

may not be compelled to refund the same. In our

considered view, the instant benefit cannot extend to an

employee merely on account of the fact, that he was not

an accessory to the mistake committed by the employer;

or merely because the employee did not furnish any

factually incorrect information, on the basis whereof the

employer committed the mistake of paying the employee

more than what was rightfully due to him; or for that

matter, merely because the excessive payment was made

to the employee, in absence of any fraud or

misrepresentation at the behest of the employee.

7. Having examined a number of judgments rendered by

this Court, we are of the view, that orders passed by the

employer seeking recovery of monetary benefits wrongly

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extended to the employees, can only be interfered with, in

cases where such recovery would result in a hardship of a

nature, which would far outweigh, the equitable balance

of the employer's right to recover. In other words,

interference would be called for, only in such cases

where, it would be iniquitous to recover the payment

made. In order to ascertain the parameters of the above

consideration, and the test to be applied, reference needs

to be made to situations when this Court exempted

employees from such recovery, even in exercise of its

jurisdiction under Article 142 of the Constitution of India.

Repeated exercise of such power, “for doing complete

justice in any cause” would establish that the recovery

being effected was iniquitous, & therefore, arbitrary. And

accordingly, the interference at the hands of this Court.

8. As between two parties, if a determination is rendered

in favour of the party, which is the weaker of the two,

without any serious detriment to the other (which is truly

a welfare State), the issue resolved would be in

consonance with the concept of justice, which is assured

to the citizens of India, even in the Preamble of the

Constitution of India. The right to recover being pursued

by the employer, will have to be compared, with the effect

of the recovery on the employee concerned. If the effect of

the recovery from the employee concerned would be,

more unfair, more wrongful, more improper, and more

unwarranted, than the corresponding right of the

employer to recover the amount, then it would be

iniquitous and arbitrary, to effect the recovery. In such a

situation, the employee's right would outbalance, and

therefore eclipse, the right of the employer to recover.

9. The doctrine of equality is a dynamic and evolving

concept having many dimensions. The embodiment of the

doctrine of equality can be found in Articles 14 to 18

contained in Part III of the Constitution of India, dealing

with “fundamental rights”. These articles of the

Constitution, besides assuring equality before the law and

equal protection of the laws, also disallow discrimination

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with the object of achieving equality, in matters of

employment; abolish untouchability, to upgrade the

social status of an ostracised section of the society; and

extinguish titles, to scale down the status of a section of

the society, with such appellations. The embodiment of

the doctrine of equality, can also be found in Articles 38,

39, 39-A, 43 and 46 contained in Part IV of the

Constitution of India, dealing with the “directive

principles of State policy”. These articles of the

Constitution of India contain a mandate to the State

requiring it to assure a social order providing justice—

social, economic and political, by inter alia minimising

monetary inequalities, & by securing the right to adequate

means of livelihood, and by providing for adequate wages

so as to ensure, an appropriate standard of life, and by

promoting economic interests of the weaker sections.

10. In view of the aforestated constitutional mandate,

equity and good conscience in the matter of livelihood of

the people of this country has to be the basis of all

governmental actions. An action of the State, ordering a

recovery from an employee, would be in order, so long as

it is not rendered iniquitous to the extent that the action of

recovery would be more unfair, more wrongful, more

improper, and more unwarranted, than the corresponding

right of the employer, to recover the amount. Or in other

words, till such time as the recovery would have a harsh

and arbitrary effect on the employee, it would be

permissible in law. Orders passed in given situations

repeatedly, even in exercise of the power vested in this

Court under Article 142 of the Constitution of India, will

disclose the parameters of the realm of an action of

recovery (of an excess amount paid to an employee)

which would breach the obligations of the State, to

citizens of this country, and render the action arbitrary,

and therefore, violative of the mandate contained in

Article 14 of the Constitution of India.

11. For the above determination, we shall refer to some

precedents of this Court wherein the question of recovery

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of the excess amount paid to the employees, came up for

consideration, and this Court disallowed the same. These

are situations, in which High Courts all over the country,

repeatedly and regularly set aside orders of recovery

made on the expressed parameters.

12. Reference may first of all be made to the decision in

Syed Abdul Qadir v. State of Bihar [(2009) 3 SCC 475],

wherein this Court recorded the following observation in

para 58:

“58. The relief against recovery is granted by courts

not because of any right in the employees, but in

equity, exercising judicial discretion to relieve the

employees from the hardship that will be caused if

recovery is ordered. But, if in a given case, it is proved

that the employee had knowledge that the payment

received was in excess of what was due or wrongly

paid, or in cases where the error is detected or

corrected within a short time of wrong payment, the

matter being in the realm of judicial discretion, courts

may, on the facts and circumstances of any particular

case, order for recovery of the amount paid in excess.

See Sahib Ram v. State of Haryana [1995 Supp (1)

SCC 18], Shyam Babu Verma v. Union of India [(1994)

2 SCC 521], Union of India v. M. Bhaskar [(1996) 4

SCC 416], V. Gangaram v. Director [(1997)6 SCC

139], B.J. Akkara v. Govt. of India [(2006) 11 SCC

709], Purshottam Lal Das v. State of Bihar [(2006) 11

SCC 492], Punjab National Bank v. Manjeet Singh

[(2006) 8 SCC 647] and Bihar SEB v. Bijay Bhadur

[(2000) 10 SCC 99].”

13. First and foremost, it is pertinent to note, that this

Court in its judgment in Syed Abdul Qadir case [(2009) 3

SCC 475] recognised, that the issue of recovery revolved

on the action being iniquitous. Dealing with the subject of

the action being iniquitous, it was sought to be

concluded, that when the excess unauthorised payment is

detected within a short period of time, it would be open

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for the employer to recover the same. Conversely, if the

payment had been made for a long duration of time, it

would be iniquitous to make any recovery. Interference

because an action is iniquitous, must really be perceived

as, interference because the action is arbitrary. All

arbitrary actions are truly, actions in violation of Article

14 of the Constitution of India. The logic of the action in

the instant situation, is iniquitous, or arbitrary, or

violative of Article 14 of the Constitution of India,

because it would be almost impossible for an employee to

bear the financial burden, of a refund of payment

received wrongfully for a long span of time. It is

apparent, that a government employee is primarily

dependent on his wages, and if a deduction is to be made

from his/her wages, it should not be a deduction which

would make it difficult for the employee to provide for the

needs of his family. Besides food, clothing and shelter, an

employee has to cater, not only to the education needs of

those dependent upon him, but also their medical

requirements, and a variety of sundry expenses. Based on

the above consideration, we are of the view, that if the

mistake of making a wrongful payment is detected within

five years, it would be open to the employer to recover the

same. However, if the payment is made for a period in

excess of five years, even though it would be open to the

employer to correct the mistake, it would be extremely

iniquitous and arbitrary to seek a refund of the payments

mistakenly made to the employee.

14. In this context, reference may also be made to the

decision rendered by this Court in Shyam Babu Verma v.

Union of India [(1994) 2 SCC 521], wherein this Court

observed as under:

“11. Although we have held that the petitioners were

entitled only to the pay scale of Rs 330-480 in terms of

the recommendations of the Third Pay Commission

w.e.f. 1-1-1973 and only after the period of 10 years,

they became entitled to the pay scale of Rs 330-560 but

as they have received the scale of Rs 330-560 since

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1973 due to no fault of theirs and that scale is being

reduced in the year 1984 with effect from 1-1-1973, it

shall only be just and proper not to recover any excess

amount which has already been paid to them.

Accordingly, we direct that no steps should be taken to

recover or to adjust any excess amount paid to the

petitioners due to the fault of the respondents, the

petitioners being in no way responsible for the same.”

15. Examining a similar proposition, this Court in B.J.

Akkara v. Govt. of India [(2006) 11 SCC 709] observed as

under:

“28. Such relief, restraining back recovery of excess

payment, is granted by courts not because of any right

in the employees, but in equity, in exercise of judicial

discretion to relieve the employees from the hardship

that will be caused if recovery is implemented. A

government servant, particularly one in the lower

rungs of service would spend whatever emoluments he

receives for the upkeep of his family. If he receives an

excess payment for a long period, he would spend it,

genuinely believing that he is entitled to it. As any

subsequent action to recover the excess payment will

cause undue hardship to him, relief is granted in that

behalf. But where the employee had knowledge that the

payment received was in excess of what was due or

wrongly paid, or where the error is detected or

corrected within a short time of wrong payment, courts

will not grant relief against recovery. The matter being

in the realm of judicial discretion, courts may on the

facts and circumstances of any particular case refuse

to grant such relief against recovery.”

A perusal of the aforesaid observations made by this

Court in B.J. Akkara case [(2006) 11 SCC 709] reveals a

reiteration of the legal position recorded in the earlier

judgments rendered by this Court, inasmuch as, it was

again affirmed, that the right to recover would be

sustainable so long as the same was not iniquitous or

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arbitrary. In the observation extracted above, this Court

also recorded, that recovery from the employees in lower

rung of service, would result in extreme hardship to them.

The apparent explanation for the aforesaid conclusion is,

that the employees in lower rung of service would spend

their entire earnings in the upkeep and welfare of their

family, and if such excess payment is allowed to be

recovered from them, it would cause them far more

hardship, than the reciprocal gains to the employer. We

are therefore satisfied in concluding, that such recovery

from employees belonging to the lower rungs (i.e. Class

III and Class IV—sometimes denoted as Group C and

Group D) of service, should not be subjected to the ordeal

of any recovery, even though they were beneficiaries of

receiving higher emoluments, than were due to them.

Such recovery would be iniquitous and arbitrary and

therefore would also breach the mandate contained in

Article 14 of the Constitution of India.

16. This Court in Syed Abdul Qadir v. State of Bihar

[(2009) 3 SCC 475] held as follows:

“59. Undoubtedly, the excess amount that has been

paid to the appellant teachers was not because of any

misrepresentation or fraud on their part and the

appellants also had no knowledge that the amount that

was being paid to them was more than what they were

entitled to. It would not be out of place to mention here

that the Finance Department had, in its counter-

affidavit, admitted that it was a bona fide mistake on

their part. The excess payment made was the result of

wrong interpretation of the rule that was applicable to

them, for which the appellants cannot be held

responsible. Rather, the whole confusion was because

of inaction, negligence and carelessness of the officials

concerned of the Government of Bihar. The learned

counsel appearing on behalf of the appellant teachers

submitted that majority of the beneficiaries have either

retired or are on the verge of it. Keeping in view the

peculiar facts and circumstances of the case at hand

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and to avoid any hardship to the appellant teachers,

we are of the view that no recovery of the amount that

has been paid in excess to the appellant teachers

should be made.”

Premised on the legal proposition considered above,

namely, whether on the touchstone of equity and

arbitrariness, the extract of the judgment reproduced

above, culls out yet another consideration, which would

make the process of recovery iniquitous and arbitrary. It

is apparent from the conclusions drawn in Syed Abdul

Qadir case [(2009) 3 SCC 475], that recovery of excess

payments, made from the employees who have retired

from service, or are close to their retirement, would entail

extremely harsh consequences outweighing the monetary

gains by the employer. It cannot be forgotten, that a

retired employee or an employee about to retire, is a class

apart from those who have sufficient service to their

credit, before their retirement. Needless to mention, that

at retirement, an employee is past his youth, his needs are

far in excess of what they were when he was younger.

Despite that, his earnings have substantially dwindled (or

would substantially be reduced on his retirement).

Keeping the aforesaid circumstances in mind, we are

satisfied that recovery would be iniquitous and arbitrary,

if it is sought to be made after the date of retirement, or

soon before retirement. A period within one year from the

date of superannuation, in our considered view, should be

accepted as the period during which the recovery should

be treated as iniquitous. Therefore, it would be justified to

treat an order of recovery, on account of wrongful

payment made to an employee, as arbitrary, if the

recovery is sought to be made after the employee's

retirement, or within one year from the date of his

retirement on superannuation.

17. Last of all, reference may be made to the decision in

Sahib Ram v. Union of India [1995 Supp (1) SCC 18]

wherein it was concluded as under:

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“4. Mr Prem Malhotra, learned counsel for the

appellant, contended that the previous scale of Rs 220-

550 to which the appellant was entitled became Rs

700-1600 since the appellant had been granted that

scale of pay in relaxation of the educational

qualification. The High Court was, therefore, not right

in dismissing the writ petition. We do not find any force

in this contention. It is seen that the Government in

consultation with the University Grants Commission

had revised the pay scale of a Librarian working in the

colleges to Rs 700-1600 but they insisted upon the

minimum educational qualification of first or second

class MA, MSc, MCom plus a first or second class

BLib Science or a Diploma in Library Science. The

relaxation given was only as regards obtaining first or

second class in the prescribed educational

qualification but not relaxation in the educational

qualification itself.

5. Admittedly the appellant does not possess the

required educational qualifications. Under the

circumstances the appellant would not be entitled to

the relaxation. The Principal erred in granting him the

relaxation. Since the date of relaxation the appellant

had been paid his salary on the revised scale. However,

it is not on account of any misrepresentation made by

the appellant that the benefit of the higher pay scale

was given to him but by wrong construction made by

the Principal for which the appellant cannot be held to

be at fault. Under the circumstances the amount paid

till date may not be recovered from the appellant. The

principle of equal pay for equal work would not apply

to the scales prescribed by the University Grants

Commission. The appeal is allowed partly without any

order as to costs.”

(emphasis supplied)

It would be pertinent to mention, that Librarians were

equated with Lecturers, for the grant of the pay scale

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of Rs 700-1600. The above pay parity would extend to

Librarians, subject to the condition that they possessed

the prescribed minimum educational qualification (first

or second class MA, MSc, MCom plus a first or second

class BLib Science or a diploma in Library Science,

the degree of MLib Science being a preferential

qualification). For those Librarians appointed prior to

3-12-1972, the educational qualifications were relaxed.

In Sahib Ram case [1995 Supp (1) SCC 18], a mistake

was committed by wrongly extending to the appellants

the revised pay scale, by relaxing the prescribed

educational qualifications, even though the appellants

concerned were ineligible for the same. The appellants

concerned were held not eligible for the higher scale,

by applying the principle of “equal pay for equal

work”. This Court, in the above circumstances, did not

allow the recovery of the excess payment. This was

apparently done because this Court felt that the

employees were entitled to wages, for the post against

which they had discharged their duties. In the above

view of the matter, we are of the opinion, that it would

be iniquitous and arbitrary for an employer to require

an employee to refund the wages of a higher post,

against which he had wrongfully been permitted to

work, though he should have rightfully been required

to work against an inferior post.

18. It is not possible to postulate all situations of

hardship which would govern employees on the issue of

recovery, where payments have mistakenly been made by

the employer, in excess of their entitlement. Be that as it

may, based on the decisions referred to hereinabove, we

may, as a ready reference, summarise the following few

situations, wherein recoveries by the employers, would be

impermissible in law:

(i) Recovery from the employees belonging to Class III

& Class IV service (or Group C and Group D service).

(ii) Recovery from the retired employees, or the

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employees who are due to retire within one year, of the

order of recovery.

(iii) Recovery from the employees, when the excess

payment has been made for a period in excess of five

years, before the order of recovery is issued.

(iv) Recovery in cases where an employee has

wrongfully been required to discharge duties of a

higher post, and has been paid accordingly, even

though he should have rightfully been required to work

against an inferior post.

(v) In any other case, where the court arrives at the

conclusion, that recovery if made from the employee,

would be iniquitous or harsh or arbitrary to such an

extent, as would far outweigh the equitable balance of

the employer's right to recover.”

12.A bare perusal of the aforesaid judgment rendered in the

case of Rafiq Masih (supra) would show that the judgment

rendered in the case of Chandi Prasad Uniyal has though been

considered but has been departed from in view of the law laid

down in a catena of judgments rendered by the Hon’ble Apex

Court in the case of Shyam Babu Verma (supra), Sahib Ram

(supra), M. Bhaskar (supra), B. Ganga Ram (supra), Bijay

Bhadur (supra), Purshottam Lal Das (supra), B.J. Akkara

(supra) and Syed Abdul Qadir (supra) and accordingly based on

the said decisions five situations have been summarized where

though payments have been made mistakenly to the employees

by the employers, in excess of their entitlement but recovery by

the employers would be impermissible in law and one of such

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situation envisaged therein is “recovery from the employees,

when the excess payment has been made for a period in excess

of five years, before the order of recovery is issued”. In fact, the

Hon’ble Apex Court in the case of Rafiq Masih (supra) has also

held that recovery would be impermissible in law in any other

case, where the court arrives at the conclusion, that recovery if

made from the employee, would be iniquitous or harsh or

arbitrary to such an extent, as would far outweigh the equitable

balance of the employer's right to recover.

13.Now, coming back to the present case we find from the

records that recovery has been sought to be made from the

respondent, pertaining to excess payment made to him, for a

period in excess of five years, before the order of recovery dated

23.09.2021 was issued by the Divisional Personnel Officer, East

Central Railway, Danapur, wherein it has been stated that as per

the RBE No. 67/2007 and re-fixation V.O.O No. EL/Pay

fixation/ Supervisor/ II dated 05.12.2014, the respondent’s pay

fixation was done in excess since the year 2004, hence the same

has been rectified and re-fixation of pay has been done,

resulting in the amount of deduction (recovery) totaling to a sum

of Rs. 17,65,430/-, hence if the respondent has got any

objection, he can file his written representation within 15 days.

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In fact, by an internal communication dt. 30.11.2018, a detailed

calculation chart was prepared and circulated with regard to re-

fixation of the pay of the respondent with effect from

01.04.2004. Subsequently, the petitioner no. 5 had passed an

order dt. 18.02.2022 on the representation of the respondent,

holding that recovery of excess amount paid to the respondent is

justified inasmuch as the same is not harsh, since the pay of the

respondent was rectified in the year 2018 whereas he will

superannuate on 31.01.2026, thus it is clear that more than five

years before the retirement of the respondent, pay has been re-

fixed, therefore neither the judgment rendered by the Hon’ble

Apex Court in the case of Rafiq Masih (supra) nor RBE No.

72/2016 shall be applicable to the case of the respondent.

14.We further find that paragraph No. 18 of the judgment

rendered by the Hon’ble Apex Court in the case of Rafiq Masih

(supra) has been accepted by the Government of India and

accordingly Office Memorandum dated 02.03.2016 has been

issued by the Ministry of Personnel, Public Grievances &

Pensions, Department of Personnel & Training, Government of

India, paragraph no. 5 whereof is reproduced herein below:-

“5. The matter has, consequently, been examined in

consultation with the Department of Expenditure and the

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Department of Legal Affairs. The Ministries /

Departments are advised to deal with the issue of

wrongful / excess payments made to Government servants

in accordance with above decision of the Hon'ble

Supreme Court in CA No.11527 of 2014 (arising out of

SLP (C) No.11684 of 2012) in State of Punjab and others

etc. vs Rafiq Masih (White Washer) etc. However,

wherever the waiver of recovery in the above-mentioned

situations is considered, the same may be allowed with

the express approval of Department of Expenditure in

terms of this Department's OM No.18/26/2011-Estt (Pay-

I) dated 6

th

February, 2014.”

15.The aforesaid Office Memorandum dated 02.03.2016 has

been adopted mutatis mutandis and made applicable to the

Railway employees vide RBE No. 72/2016 dated 22.06.2016

issued by the Railway Board, Ministry of Railways.

16.As far as the present case is concerned, the same is

squarely covered by paragraph no. 18 (iii) of the judgment

rendered by the Hon’ble Apex Court in the case of Rafiq Masih

(supra), since in the present case recovery has been sought to be

made pertaining to excess payment made to the respondent for a

period in excess of five years, before issuance of the order of

recovery dated 23.09.2021 by the Divisional Personnel Officer,

East Central Railway, Danapur, whereby the amount of recovery

has been quantified to be a sum of Rs. 17,65,430/-. Admittedly,

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the excess payment has been assessed to have been made in the

present case for a period in excess of five years i.e. with effect

from the year 2004 till the month of September, 2020 which

totals up to about 17 years. Thus, we find that the contention of

the petitioners to the effect that the judgment rendered in the

case of Rafiq Masih (supra) is not applicable in the facts and

circumstances of the present case, since more than five years of

service was remaining at the time the assessment of the amount

to be recovered was made, leading to the respondent having not

suffered any hardship, is fallacious. In the present case

admittedly, the excess payment has been made to the respondent

for a period in excess of five years, before the order of recovery

was issued, as is apparent from the table/ chart reproduced in the

aforesaid letter dated 30.11.2018, re-fixing and reducing the pay

of the respondent with effect from the year 2004 up to

01.07.2017. Consequently, we find that the case of the

respondent is not only covered by the law laid down by the

Hon’ble Apex Court in the case of Rafiq Masih (supra) but also

by the Office Memorandum dated 02.03.2016, issued by the

Ministry of Personnel, Public Grievances & Pensions,

Department of Personnel & Training, Government of India and

RBE No. 72/2016 dated 22.06.2016, issued by the Railway

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Board, Ministry of Railways.

17.Now coming to the judgments referred to by the learned

counsel for the petitioners, we are of the view that none of them

would be applicable in the present case, since the law laid down

in the judgment rendered by the Hon’ble Apex Court in the case

of Rafiq Masih (supra) has been adopted by the petitioners vide

RBE No. 72/2016 dated 22.06.2016, issued by the Railway

Board, Ministry of Railways. Nonetheless, as far as the

judgments rendered in the case of Raj Kumar Batra (supra) and

G. Srinivas (supra) are concerned, they merely postulate that in

case mistake is detected, the same can be rectified by the

authority. As regards the judgment rendered in the case of

Chandi Prasad Uniyal (supra), we find that the judgment

rendered in the case of Rafiq Masih (supra) has already dealt

with the same and only thereafter, the Hon’ble Apex Court has

summarized the situations where recoveries by the employers is

impermissible in law. Now, coming to the case of Jagdev Singh

(supra), the same is distinguishable in the facts and

circumstances of the present case inasmuch as in the said case

the Hon’ble Apex Court has held that since the officer to whom

the payment was made in excess was clearly placed on notice

that any payment found to have been made in excess would be

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required to be refunded, the officer is bound by his undertaking,

hence the recovery is permissible, however the same is not the

case in the present matter. Nevertheless, we find that in a catena

of judgments referred to hereinabove in the preceding

paragraphs, the Hon’ble Apex Court has categorically held that

in case there is no misrepresentation on the part of the employee

leading to excess payment being made to him on the head of

salary, no recovery is permissible.

18.Having regard to the facts and circumstances of the

present case and for the foregoing reasons, we find that the

present case is squarely covered by the Office Memorandum

dated 02.03.2016, issued by the Ministry of Personnel, Public

Grievances & Pensions, Department of Personnel & Training,

Government of India as also by the RBE No. 72/2016 dated

22.06.2016, issued by the Railway Board, Ministry of Railways,

whereby the petitioners have accepted the decision rendered by

the Hon’ble Apex Court in the case of Rafiq Masih (supra),

hence no recovery is permissible as far as the case of the

respondent herein is concerned, even if the petitioners pass an

adverse order regarding re-fixation of pay of the respondent, in

pursuance of the directions issued to the petitioners by the Ld.

CAT by the impugned Order dated 31.01.2025 to pass a

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reasoned and a speaking order regarding re-fixation of pay of

the respondent within three months in view of the precedents as

also considering the Railway Rules. Thus, we do not find any

infirmity much less any perversity in the impugned order dated

31.01.2025 passed by the learned CAT in O.A. No.

050/00764/2023, hence the present writ petition is dismissed

being bereft of any merit.

S.Sb/-

(Mohit Kumar Shah, J)

(Shailendra Singh, J)

AFR/NAFR AFR

CAV DATE N/A

Uploading Date 22.01.2026

Transmission Date N/A