Excess Payment Of Allowances To Employees Not Recoverable Due To Inadvertent Error On Part Of Employer: New Delhi Central Administrative Tribunal

Brief Facts:

The matter pertained to an Office Order issued by New Delhi Municipal Council. This order entailed the rectification and re-fixing of the Pay/Grade Pay and other allowances of the applicants in the 7th CPC Pay Matrix Level-4 (Rs.25500-81100) effective from their date of joining. Additionally, the Management initiated a recovery of Rs.10,000/- per month from the applicants' salaries for March 2022, without issuing any show cause notice or providing an opportunity for the applicants to respond. Despite various representations made by the applicants to address their concerns, no resolution was achieved. Feeling aggrieved, the applicants approached the Central Administrative Tribunal Principal Bench (“Tribunal”) and filed an original application.

The applicants argued that the action was not merely a rectification of an error but rather a unilateral decision to revise the pay and allowances of the applicants. The applicants were originally selected and appointed in January 2019, following a successful selection process to the post of Draftsman Grade-III with a Grade Pay of Rs.2800/-. Their initial pay was fixed at Rs.29,200/- in the pay matrix of Rs.29200-92300 (Level 5 in 7th CPC) via an order. However, the Management, through the order, reduced their pay to Rs.25,500/- with a Grade Pay of Rs.2400/- in the pay matrix of Rs.25500-81100 (Level 4 in 7th CPC) from the date of their appointment. They argued that the other departments within the Government of India maintain a Grade Pay of Rs.2800/- for the post of Draftsman.

In response, the Management argued that the advertisement for the post of Draftsman Grade-III issued in 2015 explicitly mentioned the pay scale of Rs.8500-26300 + GP 2800/- in the 6th DTL Pay Scale. It further argued that with the issuance of the New Delhi Municipal Council (Conditions of Service of Municipal Officers) Regulations, 2016, the salary of all NDMC employees was to be operated under the Central Civil Services (Revised Pay) Rules, 2008. As per the recruitment rules, recruitments made after this date were to be conducted under the 7th CPC, and consequently, the pay of newly recruited Draftsman Grade-III was adjusted accordingly. The discrepancy in the offer of appointment issuing the pay at level 5 instead of level 4 was acknowledged as an inadvertent error, which was rectified through a subsequent order of recovery.

Observations by the Tribunal:

The Tribunal noted that Management did not allege that the applicants' pay was erroneously fixed due to any misrepresentation or any act of omission or commission on the part of the applicants. In fact, the Management itself admitted in its counter reply that the pay of the applicants was wrongly or inadvertently fixed. While the Tribunal appreciated this admission by the Management, it held that even inadvertent mistakes on the part of the Management necessitate accountability. Moreover, the Tribunal noted that the reduction in the applicants' pay was implemented without affording them any notice or opportunity to address the matter. (referred to State of Punjab & others etc. vs. Rafiq Masih (White Washer) 2015 (4) SCC 334)

Consequently, the Tribunal ruled in favor of the applicants. The Management was instructed to cease any further recovery from the applicants and were directed to refund the entire amount recovered from the applicants within three months from the date of receiving a copy of the order.

Case Title: Parveen Kumar and Others vs New Delhi Municipal Council and Others.

Case Number: O.A. No. 1328/2022

Advocate for the Applicants: Mr. Yogesh Sharma

Advocate for the Respondents: Mr. Vikrant Pachnanda

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