Class I & II Officers May Be Exempted From Recovery of Excess Payment In Exceptional Cases, Conditions In Rafiq Masih Case Not Exhaustive: Bombay HC

"We have two very strong reasons in the present case for arriving at a conclusion that the recovery would be arbitrary, viz. unduly long period of 23 years of recovery and retirement of the petitioner", the court held.

A division bench of Justices Mangesh S. Patil and Sandeep V. Marne, passed the judgement in a writ petition challenging the Maharashtra Administrative Tribunal's (MAT) order upholding the recovery of excess benefits from petitioner's retirement benefits.

The petitioner was employed at the office of the Executive Engineer, Waghur Dam Division, Jalgaon as a Technical Assistant (daily wage) since 1982. He was absorbed into regular service as a Civil Engineering Assistant (Class III) in 1989. Subsequently, he obtained two time-bound promotions. On his retirement, the Accountant General, Mumbai realised that for the purpose of calculation of period of service, his initial appointment in 1982 was erroneously considered instead of his appointment in 1989.

The petitioner's pay was refixed and recovery of excess pay worth almost 2.6 lakhs was directed from his retirement benefits. The petitioner challenged this before the MAT which rejected his application. The petitioner then approached the High Court.

Advocate A. D. Sugdare for the petitioner submitted that even though petitioner was promoted to a Class II post, the recovery is in respect of his Class III post. The recovery for such a long period could not have been made after the retirement of the petitioner.

Advocate Subhash Chillarge for the respondents submitted that the respondents rightly withdrew the excess benefits and accordingly refixed the petitioner's pay. Recovery is a natural consequence of refixation and the petitioner cannot be permitted to retain the excess benefit erroneously given to him. Further, being a Class II officer, he is not protected under the Supreme Court judgement in State of Punjab v. Rafiq Masih.

The court referred to the Apex Court decision in Rafiq Masih regarding recovery of excess payment. It provides that inter alia, employees belonging to Class III and IV of service are protected from recovery of excess pay.

The court observed that the situations surmised in Rafiq Masih are not exhaustive. It is open to the courts to extend the benefit of protection from recovery in an appropriate case.

The court relied on the judgment in State of Maharashtra v. Madhukar Antu Patil which had granted protection from recovery on refixation of pay scale under similar circumstances. The court held that such protection will extend to the present case.

The court concluded that in an appropriate and rare case it is justified to extend the benefit of protection of recovery even to Class I or Class II officers.

The court observed that nothing prevented the respondents from correcting the mistake during the service of petitioner for about 23 years. Most of the period of recovery was when he was occupying a Class III post. Further, there is no mis-representation on the part of the petitioner in securing the excess payment.

The court weighed the two positive factors, namely, the retirement of the petitioner and the unduly long period of recovery outweigh the negative factor of petitioner retiring as a Class II officer.

The court also observed that the petitioner has rightly not challenged refixation of pay and he was still entitled to challenge recovery of excess payment after his retirement.

The court clarified that the applicability of judgement of Rafiq Masih is on the basis of the peculiar facts of the case and it does not mean that all Class I and Class II officers are protected from recovery of excess benefits.

The court set aside the judgement of the tribunal and the order effecting recovery of about 2.6 lakhs from the pensionary benefits of the petitioner. The court directed the respondents to refund the amount to the petitioner.

Case no. – Writ Petition No. 14526 of 2019

Case title – Ajabrao Rambhau Patil v. State of Maharashtra and Ors.

Also Read: Excess Payment Made To Employee Due To Erroneous Interpretation Of Rule Not Recoverable : Supreme Court