High Court · 2025

Mr. Dharm endra Bart hwal, learned counsel appearing for t he bank subm it s t hat due t o m ist ake by t he bank aut horit ies, pet it ioner’s basic pay at t he t im e of appoint m ent was fixed at a m uch higher level t han what 2 he was eligible for. He subm it s t hat since pet it ioner’s basic pay at t he t im e of ret irem ent was fixed at `4,500/ - , t herefore, at t he t im e of his appoint m ent in t he bank w.e.f. 17.12.2009, his basic pay was liable t o be fixed at `5,500/ - . Mr. Bart hwal refers t o paragraph no. 8 of t he count er affidavit filed by Mr. Him anshu Joshi, Manager, H.R. & Adm n., Region- 3, Pit horagarh, where it is st at ed t hat pet it ioner’s basic pay was erroneously fixed by Chief Manager ( Adm n./ Rural) as `11,350/ - w.e.f. 17.12.2009, and consequent ly his basic pay as on 1.12.2017 was erroneously fixed as `21,165/ - . He subm it s t hat since t he excess paym ent released t o t he pet it ioner was on account of erroneous pay fixat ion, t herefore, t he bank is well wit hin it s right t o recover t he excess am ount , wrongly paid t o t he pet it ioner.

7. Mr. Bart hwal furt her subm it s t hat t he am ount , which is sought t o be recovered was released only on

6.10.2021 and as soon as t he bank aut horit ies realized t he m ist ake, inst ruct ions for recovery of excess am ount was issued on 10.2.2023. He subm it s t hat it is j ust a correct ion of m ist ake and in view of provision cont ained in Sect ion 72 of I ndian Cont ract Act , pet it ioner cannot ret ain t he excess am ount erroneously released t o him . He relies upon a j udgm ent rendered by Apex Court in t he case of Chandi Prasad Uniyal and ot hers v. St at e of Ut t arakhand and ot hers, report ed in ( 2012) 8 SCC 417.

8. Per cont ra, Mr. Sanj ay Bhat t , learned counsel for t he pet it ioner subm it s t hat aft er ret iring from I ndian Arm y, pet it ioner applied for appoint m ent as Arm ed Guard and aft er appoint m ent , his pay was fixed at a cert ain level based on basic pay received by pet it ioner at t he t im e of his ret irem ent . He subm it s t hat pet it ioner had 3 furnished correct inform at ion about his basic pay in I ndian Arm y and had also produced all necessary docum ent s, t herefore, t he bank aut horit ies decided t o grant him a part icular basic pay; t he said decision was t aken in view of t he policy/ cir culars issued by t he com pet ent aut horit y in t he bank.

9. Learned counsel for t he pet it ioner t hus subm it s t hat t he allegat ion t hat am ount , in excess of what pet it ioner was ent it led, was released, is incorrect . He furt her subm it s t hat it is nobody’s case t hat pet it ioner was responsible in any m anner for get t ing t he excess am ount released in his favour nor t here is any allegat ion t hat pet it ioner played fraud upon t he bank aut horit ies. Thus, he subm it s t hat if t he com pet ent aut horit y in t he bank has decided t o fix t he basic pay of t he pet it ioner at a part icular level, t he bank cannot t hen recover t hat am ount by cont ending t hat it was wrongly paid t o pet it ioner.

10. Learned counsel for t he pet it ioner relies upon paragraph no. 18 of t he law declared by Apex Court in t he Case of St at e of Punj ab and ot hers v. Rafiq Masih ( Whit e Washer) and ot hers, report ed as ( 2015) 4 SCC 334, which is ext ract ed below: - “ 1 8 . I t is not possible t o post ulat e all sit uat ions of hardship which would govern em ployees on t he issue of recovery, where paym ent s have m ist akenly been m ade by t he em ployer, in excess of t heir ent it lem ent . Be t hat as it m ay, based on t he decisions referred t o hereinabove, we m ay, as a reference, sum m arise few sit uat ions, wherein recoveries by t he em ployers, would be im perm issible in law: following t he ( i) Recovery from t he em ployees belonging t o Class I I I and Class I V service ( or Group C and Group D service) . ( ii) Recovery from t he ret ired em ployees, or t he em ployees who are due t o ret ire wit hin one year, of t he order of recovery. 4 ( iii) Recovery from t he em ployees, when t he excess paym ent has been m ade for a period in excess of five years, before t he order of recovery is issued. ( iv) Recovery in cases where an em ployee has wrongfully been required t o discharge dut ies of a higher post , and has been paid accordingly, even t hough he should have right fully been required t o work against an inferior post . ( v) I n any ot her case, where t he court arrives at t he conclusion, t hat recovery if m ade from t he em ployee, would be iniquit ous or harsh or arbit rary t o such an ext ent , as would far out weigh t he equit able balance of t he em ployer's right t o recover.

11. Learned counsel appearing t he bank subm it s t hat since t he excess paym ent was released t o t he pet it ioner only in t he year 2021, t herefore, t he bank is well wit hin it s right t o recover t he excess am ount paid t o him , as it is well w it hin t en years period. I n support of t his cont ent ion, he relies upon t he j udgm ent rendered by Apex Court in t he case of Thom as Daniel v. St at e of Kerala, report ed as 2022 SCC OnLine SC 536. Paragraph no. 15 of t he said j udgm ent is reproduced below: - “ 15. Having regard t o t he above, we are of t he view t hat an at t em pt t o recover t he said increm ent s aft er passage of unj ust ified.” t en years of his ret irem ent

12. I n t he case of Jagdish Prasad Singh v. St at e of Bihar and ot hers, report ed as ( 2024) SCC OnLine SC 1909, Hon’ble Suprem e Court has held as under: - “ 2 1 . We firm ly believe t hat any decision t aken by t he St at e Governm ent t o reduce an em ployee's pay scale and recover t he excess am ount cannot be applied ret rospect ively and t hat t oo aft er a long t im e gap. I n t he case of Syed Abdul Qadir v. St at e of Bihar 1, t his Court held t hat when t he excess unaut horised paym ent is det ect ed wit hin a short period of t im e, it would be open for t he em ployer t o recover t he sam e. Conversely, if t he paym ent had been m ade for a long durat ion of t im e, it would be iniquit ous t o m ake any recovery. The relevant paras of t he Syed Abdul Qadir ( supra) are ext ract ed hereinbelow : - “ 57. This Court , in a cat ena of decisions, has grant ed relief against recovery of excess paym ent of em olum ent s/ allowances if ( a) t he excess am ount was not paid on account of any m isrepresent at ion or fraud on 5 t he part of t he em ployee, and ( b) if such excess paym ent was m ade by t he em ployer by applying a wrong principle for calculat ing t he pay/ allowance or on t he basis of a part icular int erpret at ion of rule/ order, which is subsequent ly found t o be erroneous. recovery

58. The relief against t he hardship t hat will be caused grant ed by court s not because of any right in t he em ployees, but in equit y, exercising j udicial discret ion t o relieve t he em ployees recovery is ordered. But , if in a given case, it is proved t hat t he em ployee had knowledge t hat t he paym ent received was in excess of what was due or wrongly paid, or in cases is det ect ed or correct ed wit hin a short t im e of wrong paym ent , t he m at t er being j udicial t he discret ion, court s m ay, on fact s and circum st ances of any part icular case, order for recovery of t he am ount paid in excess. realm of t he t he error

59. Undoubt edly, t he excess am ount t hat has been paid t o t he appellant t eachers was not because of any m isrepresent at ion or fraud on t heir part and t he appellant s also had no knowledge t hat t he am ount t hat was being paid t o t hem was m ore t han what t hey were ent it led t o. I t would not be out of place t o m ent ion here t hat t he Finance Depart m ent had, in it s count er- affidavit , adm it t ed t hat it was a bona fide m ist ake on t heir part . The excess paym ent m ade was t he result of wrong int erpret at ion of t he Rule t hat was applicable t o t hem , for which t he appellant s cannot be held responsible. Rat her, t he whole confusion was because of inact ion, negligence and carelessness of t he officials concerned of t he Governm ent of Bihar. Learned counsel appearing on behalf of t he appellant t eachers subm it t ed t hat m aj orit y of t he beneficiar ies have eit her ret ired or are on t he verge of it . fact s and Keeping circum st ances of t he case at hand and t o appellant t eachers, we are of t he view t hat no recovery of t he am ount t hat has been paid in excess t o t he appellant t eachers should be m ade.” t he peculiar hardship in view t he t o ( em phasis supplied) 2 2 . Sim ilarly, t his Court in I TC Lim it ed v. St at e of Ut t ar Pradesh2, held as under : - t o give invoked “ 108. We m ay give an exam ple from service j urisprudence, where a principle of equit y is t o an frequent ly em ployee sim ilar circum st ances. Where t he pay or ot her t o em olum ent s det erm ined and paid by t he em ployer, and subsequent ly t he em ployer finds, ( usually on audit verificat ion) t hat on account of wrong som ewhat em ployee relief 6 t he im plem ent ing underst anding of t he applicable rules by t he officers rules, excess paym ent is m ade, court s have recognised t he t o lim it ed relief recovery of past excess paym ent s, t o reduce hardship t o t he innocent em ployees, who benefit ed from such wrong int erpret at ion.” in regard t o give ( em phasis supplied) ”

13. Mr. Dharm endra Bart hwal, learned counsel appearing for t he bank relies upon paragraph no. 14 of t he j udgm ent rendered by t his Court in Writ Pet it ion ( S/ S) No. 335 of 2023, which is ext ract ed below: - t hat as it m ay. From “ 14. Be t he aforesaid j udgm ent s, it is clear t hat excess am ount , if paid t o an em ployee, would be recoverable ( i) only when t he em ployee concerned is in any m anner responsible for such excess paym ent , e.g. by playing fr aud or by adopt ing ot her deceit ful m eans; or ( ii) where an em ployee has given an undert aking before grant of such m onet ary benefit t o t he effect t hat in case t he am ount paid t o him is found t o be not adm issible or is found t o be in excess of what is due t o him , t hen he will refund such am ount / excess am ount .”

14. By rely ing on t he said j udgm ent , learned counsel appearing for t he bank subm it s t hat em ployer cannot be rest rained from m aking recovery of t he excess paym ent from an em ployee, if t he em ployee is, in any m anner responsible for excess paym ent e.g. by playing fraud or by adopt ing ot her deceit ful m eans or where an em ployee has given an undert aking before grant of such m onet ary benefit t o t he effect t hat , in case t he am ount paid t o him is lat er found t o be not adm issible or is found t o be in excess of what is due t o him , t hen he shall be liable t o refund such excess am ount .

15. An em ployee, who succeeded fraudulent ly receiving excess paym ent cannot be perm it t ed t o ret ain such excess am ount . Sim ilar ly, an em ployee who gives an undert aking t hat he will be liable for refund of t he excess am ount before receiving t he am ount which is lat er found t o be in excess, cannot claim 7 prot ect ion against recovery, if t he undert aking given by him was before paym ent of such excess am ount .

16. I n such view of t he m at t er, t he writ pet it ion is decided in t erm s of j udgm ent dat ed 18.9.2025 rendered in Writ Pet it ion ( S/ S) No. 335 of 2023 and ot her connect ed pet it ions. Pet it ioner shall be at libert y t o challenge re- fixat ion or reduct ion of basic pay in separat e proceedings. The Deput y Manager, B&O, St at e Bank of I ndia, Haldwani is direct ed t o do t he needful, wit hin six weeks from t he dat e of present at ion of cert ified copy of t his order. Dt : 24.09.2025 Navin NAVEEN CHANDRA DN: c=IN, o=HIGH COURT OF UTTARAKHAND, ou=HIGH COURT OF UTTARAKHAND, 2.5.4.20=3be23325146e76a0642bdf4943fb9046f487 df006da82a131bb4e4403d3c0a15, postalCode=263001, st=UTTARAKHAND, serialNumber=18167EEFB5CA8CFFD421A103819DA 875643AF56D653D095C6ED9A86DAAB21CE5, cn=NAVEEN CHANDRA ( M a n o j K u m a r Ti w a r i , J.) 8