WP(C) No.1051/2024 IN THE HIGH COURT OF JAMMU & KASHMIR AND LADAKH AT SRINAGAR Reserved on: 02.07.2025 Pronounced on: 11.07.2025 WP(C) No.1051/2024 HAFIZA AKHTER ... PETITIONER(S) Through: - Mr. Shakir Haqani, Advocate. Vs. UT OF J&K & OTHERS …RESPONDENT(S) Through: - Mr. Ilyas Nazir Laway, GA. CORAM: HON’BLE MR. JUSTICE SANJAY DHAR, JUDGE JUDGMENT 1) The petitioner, through the medium of present petition, has challenged communication dated 22.03.2024 addressed by respondent No.3 to respondent No.4, whereby, while forwarding the pension case of the petitioner, it has been stated that recovery of Rs.6,05,007/ on account of drawal of excess pay has to be made from her Death-Cum-Retirement Gratuity (DCRG). 2) As per case of the petitioner, she was initially appointed on daily wage basis but later on, in terms of communication dated 10.09.1997, she was placed in the regular pay scale of Rs.750-940/ as was admissible to Class-IV employees. It has been further submitted that WP(C) No.1051/2024 vide order dated 19.10.1998, the petitioner was designated as Junior Assistant at Town Area Committee, Anantnag, and posted in Directorate of Local Bodies, Kashmir, for discharging her duties in Receipt and Dispatch Section. It has been pleaded that in terms of Proviso to Rule 5 of SRO 64 of 1994, the petitioner was placed in the pay scale of Rs.3050-4910, which is attached to the post of Junior Assistant. This was done in terms of order dated 19.10.2002. According to the petitioner, she remained stagnated in the aforesaid pay scale against the post of Junior Assistant until her superannuation on 31.05.2022. 3) It has been submitted that after the superannuation of the petitioner, respondent No.3 has addressed the impugned communication to respondent No.4, whereby an amount of Rs.6,05,007/ has been held to be recoverable from DCRG of the petitioner on account of excess pay drawn by her. 4) The petitioner has challenged the impugned communication and the action of the respondents on the grounds that the same has been issued without giving any opportunity of hearing to her. It has been contended that the respondents have not held any enquiry before holding that the petitioner has drawn excess pay. It has been WP(C) No.1051/2024 contended that the respondents are estopped from recovery of any amount from the pensionary benefits of the petitioner after her retirement on the principle of equitable estoppel. 5) The respondents have contested the writ petition by filing a reply thereto. In their reply, the respondents have submitted that after initial engagement of the petitioner as a daily wager with effect from 05.08.1994, she was brought into regular establishment with effect from 10.09.1997. It has been submitted that the petitioner came to designated as Junior Assistant with effect from 09.10.1998 and the pay scale attached to the said post was released in her favour with effect from 19.10.2002. It has been claimed that unauthorized/illegal up-gradation of petitioner as Junior Assistant stands cancelled by the Director Local Bodies, Kashmir-respondent No.2, vide his order dated 28.08.2023 and pursuant to this, the pension case of the petitioner has been forwarded by respondent No.3 to respondent No.4 in terms of impugned communication dated 22.03.2024 indicating therein that an amount of Rs.6,05,007/ is recoverable from the DCRG of the petitioner on account of drawal of excess pay by her due to her illegal upgradation. WP(C) No.1051/2024 6) I have heard learned counsel for the parties and perused record of the case. 7) It is an admitted case of the parties that the petitioner was initially appointed on daily wage basis and thereafter her services were regularized in the pay scale of Rs.750- 940/ with effect from 10.09.1997. The petitioner was designated as Junior Assistant with effect from 09.10.1998 and thereafter the pay scale attached to the said post was released in her favour on 19.10.2002. The claim of the respondents is that this upgradation/ promotion of the petitioner to the post of Junior Assistant is illegal and unauthorized which has been cancelled by the respondents by issuing order dated 28.08.2023 and, therefore, the excess pay drawn by the petitioner on account of her illegal placement in higher scale of pay and consequent release of in-situ promotion in her favour on the basis of her upgraded pay scale, is liable to be recovered. 8) The question whether excess pay drawn by an employee can be recovered from him/her after his/her retirement has come up for consideration before the Supreme Court in a number of judgments. The first in the series is the judgment delivered by the Supreme Court in the case WP(C) No.1051/2024 of State of Punjab vs. Rafiq Masih (White Washer), (2015) 4 SCC 334. The Supreme Court, while considering the situations of hardship caused to an employee if recovery is directed to reimburse the employer, disallowed the same and exempted the beneficiary employees from such recovery. The Court held as under: “As between two parties, if a determination is rendered in favour of the party, which is the weaker of the two, without any serious detriment to the other (which is truly a welfare State), the issue resolved would be in consonance with the concept of justice, which is assured to the citizens of India, even in the preamble of the Constitution of India. The right to recover being pursued by the employer, will have to be compared, with the effect of the recovery on the concerned employee. If the effect of the recovery from the concerned employee would be, more unfair, more wrongful, more improper, and more unwarranted, than the corresponding right of the employer to recover the amount, then it would be iniquitous and arbitrary, to effect the recovery. In such a situation, the employee's right would outbalance, and therefore eclipse, the right of the employer to recover. xxx xxx xxx 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 herein above, we may, as a ready reference, summarise the following few situations, wherein recoveries by the employers, would be impermissible in law: (i) Recovery from employees belonging to Class-III and Class-IV service (or Group 'C' and Group 'D' service). (ii) Recovery from retired employees, or employees who are due to retire within one year, of the order of recovery. WP(C) No.1051/2024 (iii) Recovery from 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 employee, 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. 9) The ratio laid down in the aforesaid judgment has been followed by the Supreme Court in the later judgment of Thomas Daniel vs. State of Kerala and others, 2022 SCC OnLine SC 536, and also in the latest judgment in the case of Jogeswar Sahoo & Ors. Vs. District Judge, Cuttack & Ors. 2025 SCC OnLine SC 724. The Supreme Court in the said case, after noticing the principles laid down by it in Rafiq Masih’s case (supra), observed as under: “11. In the case at hand, the appellants were working on the post of Stenographers when the subject illegal payment was made to them. It is not reflected in the record that such payment was made to the appellants on account of any fraud or misrepresentation by them. It seems, when the financial benefit was extended to the appellants by the District Judge, Cuttack, the same was subsequently not approved by the High Court which resulted in the subsequent order of recovery. It is also not in dispute that the payment was WP(C) No.1051/2024 made in the year 2017 whereas the recovery was directed in the year 2023. However, in the meanwhile, the appellants have retired in the year 2020. It is also an admitted position that the appellants were not afforded any opportunity of hearing before issuing the order of recovery. The appellants having superannuated on a ministerial post of Stenographer were admittedly not holding any gazetted post as such applying the principle enunciated by this Court in the above quoted judgment, the recovery is found unsustainable.” 10) From the above analysis of law on the subject, it is clear that it is not open to an employer to effect recovery of excess pay from an employee who is due to retire within one year of the order of recovery or who has already retired from service. It is also clear that the recovery from the employees belonging to Class-III and Class-IV service is impermissible and when the excess payment has been made in excess of five years before the order of recovery is issued, the recovery cannot be effected from the employee. The only exception to these cases would be a case where the excess payment has been made on account of any misrepresentation or fraud on the part of the employee. 11) Adverting to the facts of the present case, the respondents have not alleged any fraud or misrepresentation on the part of the petitioner while the upgraded scale of pay attached to the post of Junior Assistant was released in her favour. The respondents WP(C) No.1051/2024 have issued order cancelling the release of upgraded scale of pay attached to the post of Junior Assistant in favour of the petitioner only on 28.08.2023, i.e. well after her superannuation which took place on 31.05.2022. It is not in dispute that the petitioner belongs to Class-III service and the order regarding recovery of excess pay has been issued against her only after her retirement. Therefore, the ratio laid down by the Supreme Court in Rafiq Masih’s case (supra), as has been followed in later judgments of the Supreme Court in Thomas Daniel and Jogeswar Sahoo’s case (supra) squarely applies to the present case. The action of the respondents in seeking recovery of an amount of Rs.6,05,007/ by virtue of the impugned communication is, therefore, unsustainable in law. 12) For the foregoing reasons, the writ petition is allowed and the impugned communication dated 22.03.2024 is quashed and the respondents are restrained from effecting any recovery on account of excess pay drawn from the Death-cum-Retirement Gratuity or from any other retiral benefits of the petitioner. (Sanjay Dhar) Judge Srinagar, 11.07.2025 “Bhat Altaf-Secy” Whether the order is reportable: Yes/No Mohammad Altaf Bhat I attest to the accuracy and authenticity of this document 11.07.2025 02:51