The Patna High Court held that excess pay wrongly fixed cannot be recovered from a retired Class III employee where there is no misrepresentation, relying on Rafiq Masih, while denying his ACP claim.
Patna: The Patna High Court has held that the State cannot recover an excess amount paid to a retired Class III employee on account of an erroneous pay fixation, where there is no allegation of any misrepresentation on his part — setting aside the recovery portion of the impugned order, even as it otherwise upheld the denial of higher pay-scale benefits to him [Sachidanand Sharma v. State of Bihar and Others].
A Division Bench of Acting Chief Justice Sudhir Singh and Justice Ranjan Kumar Jha disposed of the Letters Patent Appeal, affirming the Single Judge on the substantive pay-scale question but granting the appellant relief on the recovery.
The recovery could not stand
The decisive point in the appellant’s favour concerned the State’s attempt to recover money it had earlier paid him. The benefit had been extended to him by an order of May 18, 2017 with retrospective effect, only for a recovery order to follow barely three months later, in October 2017, once the department took the view that the earlier pay fixation had been erroneous.
Applying the settled law on recovery of excess payments from employees, the Court held that the recovery could not be sustained. It relied on the Supreme Court’s decision in State of Punjab v. Rafiq Masih (White Washer), reported in (2015) 4 SCC 334, and the more recent Jageswar Sahoo v. The District Judge, Cuttack, reported in 2025 INSC 449. Since the respondents had not put forward any case that the appellant had made any misrepresentation to secure the payment, the Court held that the recovery ordered against him was impermissible, and accordingly set aside the order dated October 23, 2017 to that extent.
The principle underlying Rafiq Masih is that where an excess payment is made to an employee through no fault or misrepresentation of his own — particularly one in the lower rungs of service, or one who has retired — the State’s ordinary right to recover its money yields to considerations of hardship and equity, since the employee will have received and spent the money in good faith. The appellant’s status as a retired Class III employee, and the absence of any misrepresentation, placed him squarely within that protection.
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The pay-scale claim failed
On the substantive grievance, however, the appellant did not succeed. He had challenged the recall of certain pay benefits and pressed two contentions — that he had been discriminated against, and that his service rendered before his absorption ought to be counted for all purposes, including for the Assured Career Progression (ACP) benefit.
The Bench declined to interfere with the Single Judge’s rejection of that claim. The Single Judge had found that two provisions governed the case — the conditions attached to the appellant’s appointment, and Rule 22 of the MACP Rules, 2010, by virtue of which he was entitled to the benefit of ACP/MACP. But the existence of two different pay scales prior to January 1, 2006 meant that a particular document the appellant relied upon (Annexure P-10) could not assist him. Recording that reasoning, the Single Judge had held:
“Upon perusal of the documents and on the basis of the submission made by the parties, there are two provisions that are very much relevant to the petitioner’s case. The first is the condition for appointment and the second is Rule 22 of the MACP Rules, 2010 by virtue of which it is clear that the petitioner is entitled for the benefit of ACP/MACP. So far as Annexure P10 is concerned, it is admitted that there were two different pay scales prior to 01.01.2006, and in the opinion of the Court, Annexure P-10 shall not help the petitioner in any manner.”
The Division Bench found no error in this finding, noting that the appellant’s submissions had already been addressed by the Single Judge and that the conditions of appointment had themselves been reproduced in the order under challenge.
Background: three decades of litigation
The appeal was the latest chapter in a service dispute stretching back four decades. The appellant had been appointed to a Class III post in the Directorate of Adult Education in 1985. His services, along with those of others, were terminated by a common order in February 1993 — a termination that a Coordinate Bench of the High Court set aside later that year, directing that the affected employees of the non-formal education wing be absorbed. The appellant was accordingly absorbed as a Class III employee.
A second round of litigation followed in 2001, when the State again terminated the services of the appellant and others, citing the Central Government’s decision to close the Non-formal Project and stop funding it. Pursuant to interim orders in that round, the State absorbed the appellant and similarly situated employees in various departments, including the Integrated Child Development Services of the Social Welfare Department. What began as an ad hoc absorption was subsequently treated as permanent.
The present grievance arose from the treatment of the appellant’s pay and career-progression benefits in the wake of that absorption — the State contending that his absorption was in the nature of a fresh appointment excluding past-service benefits, and that the ICDS clerical cadre was a distinct entity with its own promotion structure justifying a restricted ACP pay scale, while the appellant contended that the recall of benefits granted to him was arbitrary and discriminatory. The Single Judge dismissed the challenge on the pay-scale question by his judgment of December 19, 2023, which the appellant assailed in the present Letters Patent Appeal.
Case Title: Sachidanand Sharma v. State of Bihar and Others [Letters Patent Appeal No. 46 of 2024 in CWJC No. 2472 of 2018]
Bench: Acting Chief Justice Sudhir Singh and Justice Ranjan Kumar Jha
For the Appellant: Kishore Kr. Thakur, Braj Kishore Singh and Amit Kr., Advs.
For the State: Gyan Prakash Ojha, GA-VII
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