IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA CWP No.8999 of 2023 Date of Decision: 28.07.2025 _______________________________________________________ Vijay Kumar Chibber …….Petitioner Versus State of Himachal Pradesh & Ors. … Respondents _______________________________________________________ Coram: Hon’ble Mr. Justice Sandeep Sharma, Judge. Whether approved for reporting? 1 Yes. For the Petitioner: Mr. Karan Singh Parmar, Advocate. For the Respondents: Mr. Rajan Kahol, Mr. Vishal Panwar & Mr. B.C. Verma, Additional Advocates General with Mr. Ravi Chauhan, Deputy Advocate General, for respondents-State. Mr. Rangil Singh, Advocate, for respondent No. 3. ____________________________________________________ Sandeep Sharma, Judge(oral): Precisely, the question, which needs to be determined in the case at hand is that “whether the State Government can retrospectively reduce employee’s pay scale and recover the excess amount after a period of long time?” Though aforesaid question stands duly answered, vide judgment dated 08.08.2024 passed by Hon’ble Apex Court in Civil Appeal No. 1635 of 2013, titled as Jagdish Chand Singh Vs. State of Bihar and others, but before considering the application of same in the case at hand, this Court 1Whether the reporters of the local papers may be allowed to see the judgment? 2 finds it necessary to give narration of essential facts, which may be necessary for proper adjudication of the case at hand. 2. Government of Himachal Pradesh, vide notification No. Fin. (PR)B 7-59/2010 dated 09.08.2012, introduced Assured Career Progression Scheme for its employees on completion of 4, 9 and 14 years of service in a cadre, w.e.f 27.08.2009. The scheme was optional and as per scheme, an employee can have the option either to continue in the existing Assured Career Progression Scheme after a service of 8, 16, 24 and 32 years or to opt 4, 9 and 14 years Assured Career Progression Scheme. The petitioner, who was working as Draughtsman in the respondent-department, opted for 4, 9 and 14 years Assured Career Progression Scheme, which was applicable w.e.f 27.08.2009 on notional basis and on actual basis, the benefit of scheme was admissible w.e.f the date of notification i.e. 09.08.2012. As per aforesaid scheme, an employee was entitled to a maximum of three placements in the next higher grade pay in the hierarchy of grade pays with benefit of one increment each on every placement. Vide para 3(c) of aforesaid notification dated 09.08.2012, an employee, who has rendered four years of service but less than 9 years in the cadre, and has availed benefit of placement in the next higher scale in the hierarchy of pay scales after eight years of service, shall get nothing as he has already availed benefit of one increment 3 and placement in the next higher pay scale under the existing Assured Career Progression Scheme of 8, 16, 24 and 32 years of service. Since the petitioner was working on the post of Draughtsman w.e.f. 17.09.1996 and had also availed one benefit of placement in the next higher scale after completion of eight years of service in the cadre of Draughtsman under the then existing Progression Scheme 8, 16, 24 and 32 on 17.09.2004, he was entitled for placement on completion of nine years of service under the new scheme w.e.f. 27.08.2009 on notional basis and on actual basis w.e.f 09.08.2012. When respondent-department, vide office order dated 06.08.2012, granted the benefit of placement on completion of nine years service under the new scheme, which was applicable to the petitioner w.e.f 27.08.2009 notionally, the existing basic pay prior to the date of such placement was wrongly taken as Rs.17,040+4200 grade pay=Rs.21,240/-, whereas the same should have been Rs.16,420+4200 grade pay=Rs.20,620/- and this hike of one increment in the basic pay of the petitioner, which was inadvertently given to him, could not be noticed, as such remain continued during his further service career till his retirement on 31.12.2016. 3. Upon retirement of the petitioner, the pension case in respect of the petitioner was submitted by respondent No. 2 to the Accountant General (A&E), Himachal Pradesh, Shimla, vide letter 4 dated 18.10.2016. While deciding the same, said office pointed out the aforesaid wrong fixation/undue benefit granted to the petitioner by the respondent department, vide order dated 06.08.2013. While authorizing pension, vide order dated 29.11.2016, office of Accountant General directed respondent No. 2 to re-examine the pay fixation order and regulate the pay of the petitioner. In afore background, respondent No. 2 reviewed the previous pay fixation and issued a fresh order on 25.02.2017. 4. In view of aforesaid pay fixation, revised pension case was submitted to the Accountant General, Himachal Pradesh and simultaneously, the action to recover the excess amount of Rs. 87,879/- paid to the petitioner due to wrong fixation vide order dated 06.08.2013 was initiated. After recovery on afore amount, the petitioner filed Original Application before erstwhile Himachal Pradesh Administrative Tribunal, which was subsequently transferred to this Court and registered as CWPOA No. 3397 of 2020, which was finally heard and disposed of with a direction to the respondents to refund/release the amounts, which were withheld/deducted from the retiral benefits of the petitioner. After passing of afore order, respondent-department refunded the whole amount, which was earlier recovered from the petitioner on account of wrong pay fixation. 5. During the year 2022, Government of Himachal Pradesh, 5 Finance Department vide notification dated 03.01.2022, notified the revised pay structure to all its employees including the present petitioner, which was applicable w.e.f. 01.01.2016. The respondent No. 2 being competent authority issued the pay fixation order under the HPCS (Revised Pay) Rules, 2022 in respect of the petitioner, on 04.05.2022 and referred the matter to the Accountant General (A&E), Himachal Pradesh, Shimla, vide letter dated 21.05.2022, for revising the pension. In response to afore, respondent No. 3 i.e. Accountant General decided the revised pension case of the petitioner by taking into consideration the last pay drawn as Rs.76,500/- per month instead of Rs.78,800/- as fixed vide office order dated 04.05.2022 and returned the case to respondent No. 2. After having received order dated 04.05.2022 passed by the office of Accountant General, respondents examined the case of the petitioner and noticed that when pay of the petitioner was fixed in view of Finance Dept. notification dated 03.01.2022 in the revised pay structure w.e.f 01.01.2016 on account of his option by ignoring the impact of HPCS, Rules, 2012, the existing pay prior to 01.09.2012 was again wrongly taken into consideration as Rs.22020+4600 grade pay=Rs.26620/- per month instead of Rs.21250+4600 grade pay. The pay of the petitioner was again wrongly taken into consideration despite the earlier revision pay order dated 25.02.2017, while making pay fixation 6 as issued vide office order dated 04.05.2022. Accordingly, as per remarks of the office of Accountant General (A&E), Himachal Pradesh, Shimla, vide his revised pension & retirement gratuity authorization letter dated 08.08.2022, respondent No. 2 issued the order regarding refixation of pay in respect of the petitioner, vide order dated 23.12.2022 and the last pay in respect of the petitioner has been fixed at Rs.76500/- per month (level-16, Cell-16), which was also considered by the Accountant General, while deciding the revised pension case. 6. Now, being aggrieved with the refixation of his pay, which was reduced by the margin of one increment from Rs.78800/- per month to Rs.76500/- per month, petitioner is compelled to approach this Court in the instant proceedings, praying therein for the following main reliefs:- “(i) That the respondent may very kindly be directed to release the increments that has been withheld vide order dated 16th August, 2022 may very kindly be quashed and set aside thereafter the respondents may be directed to refix the arrears after granting the increments that has been withheld. (ii) That the respondents may very kindly be directed to release the benefits that has been withheld by the respondent department along with interest.” 7. Respondents No. 1 & 2 have filed reply, wherein facts as have been noticed hereinabove are not disputed, rather an attempt 7 has been made to defeat the claim of the petitioner on the ground that petitioner was in receipt of higher pay on account of wrong pay fixation and as such, department is well within its right to revise the pay scale. However, it has been fairly admitted that pursuant to order passed by this Court, amount earlier recovered from the retiral benefits of the petitioner stands refunded. 8. Though order regarding refixation of pay in respect of petitioner, vide order dated 23.12.2022, appears to be justifiable for the facts as have been noticed herein above, but the question, which needs to be determined in the case at hand is that whether respondent-State could have reduced the petitioner’s pay scale and recovered the excess amount after approximately six years. Hon’ble Apex Court in Syed Abdul Qadir and Others Vs. State of Bihar and Others, (2009) 3 SCC 475, held that when the excess unauthorized payment is detected within a short period of time, it would be open for the employer to recover the same. Conversely, if the payment had been made for a long duration of time, it would be iniquitous to make any recovery. Following the aforesaid law laid down by Hon’ble Apex Court in Syed Abdul Qadir (supra), Hon’ble Apex Court in Civil Appeal No. 1635 of 2013 titled as Jagdish Prasad Singh Vs. State of Bihar and Others supra also dealt with the similar issue and categorically held that the State cannot recover the excess amount paid to the 8 retired employee after inordinate delay. Relevant paras of afore judgment read as under:- “21. We firmly believe that any decision taken by the State Government to reduce an employee's pay scale and recover the excess amount cannot be applied retrospectively and that too after a long time gap. In the case of Syed Abdul Qadir and Others v. State of Bihar and Others, (2009) 3 SCC 475, this Court held that when the excess unauthorised payment is detected within a short period of time, it would be open for the employer to recover the same. Conversely, if the payment had been made for a long duration of time, it would be iniquitous to make any recovery. The relevant paras of the Syed Abdul Qadir (supra) are extracted hereinbelow:- "57. This Court, in a catena of decisions, has granted relief against recovery of excess payment of emoluments/allowances if (a) the excess amount was not paid on account of any misrepresentation or fraud on the part of the employee, and (b) if such excess payment was made by the employer by applying a wrong principle for calculating the pay/allowance or on the basis of a particular interpretation of rule/order, which is subsequently found to be erroneous. 58. The relief against recovery is granted by courts not because of any right in the employees, but in equity, exercising judicial discretion to relieve the employees from the hardship that will be caused if recovery is ordered. But, if in a given case, it is proved that the employee had knowledge that the payment received was in excess of what was due or wrongly paid, or in cases where the error is detected or corrected within a short time of wrong payment, the matter being in the realm of judicial discretion, courts may, on the facts and circumstances of any particular case, order for recovery of the amount paid in excess. 59. Undoubtedly, the excess amount that has been paid to the appellant teachers was not because of any 9 misrepresentation or fraud on their part and the appellants also had no knowledge that the amount that was being paid to them was more than what they were entitled to. It would not be out of place to mention here that the Finance Department had, in its counter-affidavit, admitted that it was a bona fide mistake on their part. The excess payment made was the result of wrong interpretation of the Rule that was applicable to them, for which the appellants cannot be held responsible. Rather, the whole confusion was because of inaction, negligence and carelessness of the officials concerned of the Government of Bihar. Learned counsel appearing on behalf of the appellant teachers submitted that majority of the beneficiaries have either retired or are on the verge of it. Keeping in view the peculiar facts and circumstances of the case at hand and to avoid any hardship to the appellant teachers, we are of the view that no recovery of the amount that has been paid in excess to the appellant teachers should be made." (emphasis supplied) 22. Similarly, this Court in ITC Limited v. State of Uttar Pradesh and Others, held as under:- "108. We may give an example from service jurisprudence, where a principle of equity is frequently invoked to give relief to an employee in somewhat similar circumstances. Where the pay or other emoluments due to an employee is determined and paid by the employer, and subsequently the employer finds, (usually on audit verification) that on account of wrong understanding of the applicable rules by the officers implementing the rules, excess payment is made, courts have recognised the need to give limited relief in regard to recovery of past excess payments, to reduce hardship to the innocent employees, who benefited from such wrong interpretation." (emphasis supplied) 10 23. In the case of State of Punjab and Others v. Rafiq Masih (White Washer) and Others, (2015) 4 SCC 334, this Court held as under:- "18. It is not possible to postulate all situations of hardship which would govern employees on the issue of recovery, where payments have mistakenly been made by the employer, in excess of their entitlement. Be that as it may, based on the decisions referred to hereinabove, we may, as a ready reference, summarise the following few situations, wherein recoveries by the employers, would be impermissible in law: (i) Recovery from the employees belonging to Class III and Class IV service (or Group C and Group D service). (ii) Recovery from the retired employees, or the employees who are due to retire within one year, of the order of recovery. (iii) Recovery from the employees, when the excess payment has been made for a period in excess of five years, before the order of recovery is issued. (iv) Recovery in cases where an employee has wrongfully been required to discharge duties of a higher post, and has been paid accordingly, even though he should have rightfully been required to work against an inferior post. (v) In any other case, where the court arrives at the conclusion, that recovery if made from the employer. would be iniquitous or harsh or arbitrary to such an extent, as would far outweigh the equitable balance of the employer's right to recover." (emphasis supplied) 24. Recently, this Court in Thomas Daniel v. State of Kerala and Others, 2022 SCC OnLine SC 536, held that the State cannot recover excess amount paid to the ex-employee after the delay of 10 years. 11 25. The Government Resolution dated 8th February, 1999 to be specific, the highlighted portion supra is amenable to the interpretation that it protects the status and pay of those employees who had received their time bound promotions prior to 31 December, 1995. As a consequence, the Secretary concerned, while rejecting the representation clearly misinterpreted and misapplied the said Resolution to the detriment of the appellant. 9. In afore judgment, Hon’ble Apex Court further held that any step of reduction in the pay scale and recovery from a Government employee would tantamount to a punitive action because the same has drastic civil and evil consequences and as such, held the same to be bad, especially when such recovery is made after a long period. In the present case, vide office order dated 06.08.2013, existing basic pay prior to date of placement of the petitioner on completion of nine years service under New scheme (applicable w.e.f 27.08.2009) was wrongly fixed as Rs.17040+4200 grade pay=Rs. 21240/-, instead of Rs.16420+4200 grade pay=Rs.20620/- and having taken note of fact that benefit was not extended to the petitioner on his misrepresentation, Division Bench of this Court in CWPOA No. 3397 of 2020 has already directed the respondents to refund the amount recovered from the petitioner on account of wrong fixation, there was otherwise no occasion for the respondents to reduce the pay scale of the petitioner from Rs. 78,800/- to Rs. 76,500/- per month that too after inordinate delay of six years. 12 10. Consequently, in view of the above, this Court finds merit in the present petition and accordingly, the same is allowed. Impugned order dated 16.08.2022 (Annexure P-3) is quashed and set. Respondents are directed to refix the pay and pay arrears expeditiously, preferably within four months. Pending applications, if any, stand disposed of. (Sandeep Sharma), Judge July 28, 2025 (Sunil)