Recovery Of Excess Payment To Employee On Ground Of Erroneous Pay Scale, Cannot Be Made At End Of Service: Calcutta High Court

Background Facts

Badal Kumar Mandal (Petitioner) was appointed as a Technical Assistant at the Indian Museum (Respondent) on April 2, 2001, with a specific pay scale. In June 2005, he, along with other employees, was re-designated as a Senior Technical Assistant, with a higher pay scale. The Museum's decision to upgrade petitioners' post was based on a resolution by the Board of Trustees in 1992. Petitioner continued in the Senior Technical Assistant position until March 22, 2018, when he was reverted back to the Technical Assistant position. Dissatisfied, he challenged this decision through a writ petition.

Petitioners' challenge led to a coordination with the Central Government, which instructed compliance with a circular related to pay scales. Despite this, the Museum pursued its decision to revert Petitioners' post. The Museum also sought to reduce petitioners' terminal benefits, including pension and gratuity, and recover any excess pay received by petitioner since his appointment.

Aggrieved by the same, the petitioner filed the writ petition.

The petitioner argued that the Museum was obligated to adhere to the Central Government's instructions regarding compliance with a circular related to pay scales. Petitioner asserted that the Museum's autonomy, as granted by the Indian Museum Act of 1910, allowed for the re-designation of posts and adjustment of pay scales.

The petitioner further argued that he was entitled to terminal benefits, including pension and gratuity, based on his last held position as Senior Technical Assistant, and any attempt to reduce these benefits was unlawful and unjust. He contested the Museum's attempt to recover excess pay received by him, arguing that any audit objections raised after a significant period of time lacked credibility and should not affect his entitlements.

On the other hand, it was contended by the Respondents that the Museum was obligated to comply with the circular related to pay scales issued by the Central Government, which necessitated petitioners' reversion to his original position. The respondent disputed the validity of the Board of Trustees' resolution from 1992, suggesting that it was not legally binding in Petitioners' case. They emphasized the authority of Central Government regulations over matters such as pay scales and post re-designations, arguing that these regulations superseded any autonomy granted to the Museum.

Findings of the Court

The court observed the resolution by the Museum's Board of Trustees from 1992, indicating the Museum's autonomy in such matters. The court acknowledged the instructions issued by the Central Government regarding compliance with a circular related to pay scales, highlighting the necessity for the Museum to adhere to these regulations. It recognized the conflict between the autonomy granted to the Museum under the Indian Museum Act of 1910 and the regulations imposed by the Central Government, particularly regarding pay scales and post re-designations.

The court emphasized Petitioners' entitlement to terminal benefits based on his last held position as Senior Technical Assistant, restraining any attempts to reduce these benefits or recover excess payments received by him. The court relied on the case of State of Punjab vs. Rafiq Masih (Whitewasher) & Ors. wherein the Supreme Court held that irrespective of whether the upgradation of pay scale and posts is made contrary to law, recovery of any excess payment received by the petitioner on the ground of such revision cannot be made either at the end of the service of the employee or thereafter.

The court ordered the calculation of Petitioners' terminal benefits based on his last held position as Senior Technical Assistant and restrained any further reversions or attempts to recover excess payments.

With the aforesaid observations, the Writ Petition was allowed.

Case No. : WPO No.1586 of 2023

Case Name : Badal Kumar Mandal vs. Chairman Indian Museum Board Of Trust And Ors.

Counsel for the Petitioner : Mr. C.R. Chakraborty, Adv.; Ms. I. Ghosh, Adv.; Mr. S. Banerjee, Adv.; Ms. P.R. Jaiswarra, Adv.

Counsel for the Respondents : Mr. S. Majumder, Adv.; Mr. A. Bakshi, Adv.; Mr. S. Ghosh, Adv.