Case Background
This case arises from a dispute between the Union of India, through the Ministry of Labour and Employment, and a retired employee who had served in the Labour Welfare Organisation.
After his superannuation, the respondent approached the Central Administrative Tribunal, Patna Bench, by filing Original Application No. 78 of 2018.
Before the Tribunal, he complained that his full retiral dues had not been released for three years after retirement. He sought directions for payment of cash equivalent of earned leave, group insurance and medical allowance of Rs. 500 per month, together with 12% interest for delay.
He also asserted that some money had been recovered from his dues on the ground of excess salary payment, but he was never given any notice or explanation about this recovery or about any alleged wrong fixation of his pay scale or grade pay.
The Union of India, in its written statement before the Tribunal, accepted that recovery had been made. It explained that the employee had been given higher grade pays under ACP (Assured Career Progression) and MACP (Modified Assured Career Progression) than what he was legally entitled to.
According to the Union of India, he was wrongly allowed grade pay of Rs. 4600 instead of Rs. 4200 for the first ACP, Rs. 4800 instead of Rs. 4600 for the second ACP, and Rs. 5400 instead of Rs. 4800 under MACP, ignoring that he had already got an earlier ACP from Rs. 2800 to Rs. 4200.
On that basis, the authorities treated a part of his earlier salary as excess payment and recovered it from his retiral dues.
The Central Administrative Tribunal relied on the Supreme Court judgment in State of Punjab v. Rafiq Masih (White Washer), (2015) 4 SCC 334, to grant relief to the retired employee. It found that he had committed no error leading to the overpayment and that recovery from his retiral dues was contrary to the law declared by the Supreme Court.
The Tribunal directed the authorities to refund all amounts recovered from his retiral dues within three months, though it made no order as to costs.
Aggrieved by this direction of refund, the Union of India and concerned officers filed Civil Writ Jurisdiction Case No. 12844 of 2021 before the Patna High Court under Article 226 of the Constitution of India.
What the Court Examined and Decided
The Division Bench of the Patna High Court, comprising Hon’ble Mr. Justice Chakradhari Sharan Singh and Hon’ble Mr. Justice Madhuresh Prasad, heard the writ petition and examined whether the Tribunal was right in directing refund of the recovered amount.
The core point before the Court was whether recovery of excess salary is barred in all cases of innocent overpayment, or whether an employee’s written undertaking to refund such excess can permit recovery.
The Union of India, through its counsel, argued that the Tribunal had ignored a crucial document: an undertaking signed by the respondent at the time of fixation of his ACP/MACP benefits.
This undertaking clearly stated that if any excess payment was later found to have been made due to incorrect fixation or any discrepancy, the employee would refund that amount to the Government, either by adjustment against future payments or otherwise.
The exact language of the undertaking was:
“I hereby undertake that any excess payment that may be found to have been made as a result of incorrect fixation of any or any excess payment detected in the light of discrepancies noticed subsequently will be refunded by me to the Government Either by adjustment against further payments due to me or otherwise.”
The Central Government Counsel submitted that in view of this explicit promise, the respondent was bound by his own undertaking. Therefore, the authorities were justified in recovering the excess amount, and the Tribunal should not have ordered refund.
To support this argument, the Union of India relied on the Supreme Court judgment in High Court of Punjab & Haryana v. Jagdev Singh, (2016) 14 SCC 267. In that case, the Supreme Court had held that when an employee has given an undertaking to refund any excess payment received due to pay revision or fixation, he is bound by that undertaking, and the general protection against recovery of excess payment does not apply.
On the other side, the respondent’s counsel defended the Tribunal’s order. He argued that the Tribunal had correctly applied the law laid down in Rafiq Masih. He stressed the respondent’s advanced age and post-retirement hardship and said that recovery of money long after retirement caused serious difficulty.
He referred to a Division Bench judgment of the Patna High Court in Shobha Kant Mishra v. Union of India & Ors., 2021 (4) BLJ 423, where, despite a similar undertaking, the Court had restrained recovery of excess amount paid by a bank to a pensioner.
He also cited a Division Bench judgment of the Telangana High Court in Union of India v. A. Sreedhar, AIRONLINE 2020 TEL 213, where the High Court restrained further recovery of admitted excess payments to an employee.
The respondent’s counsel contended that in the absence of any allegation of misrepresentation or fraud by the employee, and looking at his hardship, the Tribunal was right in applying Rafiq Masih and ordering refund of the amount recovered.
After hearing both sides, the Patna High Court closely examined the pleadings and documents. The Court recorded that it was undisputed that:
- The respondent had indeed received salary in excess of what he was legally entitled to, because of incorrect fixation of pay while granting ACP/MACP.
- The excess amount had already been recovered by the petitioners from his retiral dues.
- The respondent had signed the above-quoted undertaking at the time of pay fixation.
Given these admitted facts, the Court considered which Supreme Court precedent applied more directly: Rafiq Masih or Jagdev Singh.
The Division Bench held that the case was squarely covered by Jagdev Singh. It quoted paragraph 11 of that judgment, where the Supreme Court clarified that the general principle against recovery of excess payment (as noted in Rafiq Masih) does not apply where the employee was clearly put on notice and had furnished an undertaking that any excess payment would be refunded.
In Jagdev Singh, the Supreme Court held that after opting for the revised pay scale with such a condition, the officer remained bound by his undertaking, and recovery of excess payment was permissible.
Applying that reasoning, the Patna High Court held that the respondent in the present case was similarly bound. He could not challenge the recovery when he had expressly agreed to refund any amount found to be wrongly paid due to incorrect pay fixation.
The Court then examined the Division Bench decision in Shobha Kant Mishra relied on by the respondent. It distinguished that case on facts.
In Shobha Kant Mishra, a certain amount was wrongly credited by a bank into the account of the petitioner. When the bank later tried to recover it, the Court, to balance equities, restrained any further recovery but also made it clear that the amount already recovered from the petitioner’s monthly pension would not be refunded.
Therefore, even in that case, the Court had not directed refund of the recovered amount. It only stopped future recovery. On this reasoning, the Patna High Court held that Shobha Kant Mishra did not support the respondent’s request for refund.
Having found that the Tribunal had ordered refund despite the clear undertaking and the binding Supreme Court ruling in Jagdev Singh, the Patna High Court concluded that the Tribunal’s order could not stand.
The Court held that the direction of the Tribunal to refund the amount already recovered from the respondent, which had admittedly been paid in excess because of wrong pay fixation, was legally unsustainable.
Consequently, the High Court set aside the Tribunal’s order dated 17.01.2020 in O.A. No. OA/050/00078/2018. The writ petition filed by the Union of India was allowed. No order as to costs was made.
Why This Judgment Matters
This judgment is important for government employees and pensioners who receive pay revisions or career progression benefits under ACP/MACP schemes.
It clarifies that if an employee signs a written undertaking agreeing to refund any excess payment caused by wrong fixation of pay, the government can later recover such excess amounts.
Even if the employee is retired, has not committed any fraud, and faces hardship, that undertaking will still bind him or her. In such cases, the protection given by decisions like Rafiq Masih against recovery may not apply.
The decision also shows that tribunals and courts must carefully check whether any such undertaking exists before relying on general rules against recovery. For retired employees, this means they should read and understand any declaration they sign at the time of pay fixation or promotion.
For departments, the judgment supports the view that clear undertakings, properly obtained, can legally justify recovery of overpaid salary, provided the overpayment is admitted or proved.
Legal Issues and Answers
Issue: Can a retired government employee resist recovery and claim refund of excess salary paid due to wrong pay fixation when he had signed an undertaking to refund any excess payment?
Answer: No. The Patna High Court held that in view of the specific undertaking and the Supreme Court ruling in Jagdev Singh, the employee is bound to refund the excess amount and cannot seek refund of amounts already recovered.
Issue: Did the Central Administrative Tribunal correctly apply the Supreme Court decision in Rafiq Masih while directing refund of the recovered amount?
Answer: No. The Court held that Rafiq Masih did not apply because of the undertaking. Instead, Jagdev Singh governed the situation, and therefore the Tribunal’s order directing refund was set aside.
Cases Cited by the Court
- State of Punjab v. Rafiq Masih (White Washer) and others, (2015) 4 SCC 334.
- High Court of Punjab & Haryana v. Jagdev Singh, (2016) 14 SCC 267.
- Shobha Kant Mishra v. Union of India & Ors., 2021 (4) BLJ 423.
- Union of India v. A. Sreedhar, AIRONLINE 2020 TEL 213.
Case Details
Case Number: Civil Writ Jurisdiction Case No. 12844 of 2021
Case Title: The Union of India & Ors. v. Sri Bijoy Kumar
Coram: Hon’ble Mr. Justice Chakradhari Sharan Singh and Hon’ble Mr. Justice Madhuresh Prasad
Citation: 2022 (1) PLJR 182
Advocates: For the petitioners (Union of India and others): Mr. Pradeep Kumar, C.G.C., and 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 service and retiral benefits matter.
Date of Patna High Court Judgment: 20.12.2021
Impugned Order: Order dated 17.01.2020 in O.A. No. OA/050/00078/2018 passed by the Central Administrative Tribunal, Patna Bench.
Link to Judgment: Click here to read the full judgment of the Patna High Court
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