Teachers who signed undertakings to refund benefits released by mistake cannot resist later demands to return them: recovery of excess pay is permissible in such cases, the Supreme Court has held while dismissing appeals by lecturers of the National Institute of Technology.
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New Delhi: The Supreme Court has dismissed a batch of appeals by teachers of the National Institute of Technology (NIT), Calicut, upholding the withdrawal and recovery of Academic Grade Pay benefits that were extended to them by mistake in October 2009 and taken back in January 2010 [Dr. M.K. Ravi Varma and Others v. National Institute of Technology and Others].
Justice Dipankar Datta authored the judgment for a Bench that also included Justice Sheel Nagu. The appeals arose from proceedings before the Kerala High Court.
The undertakings made the difference
A mistake had indeed been committed in extending the benefit, the Court found. Since the teachers had agreed in writing to refund excess payments, they could not claim the protection of Rafiq Masih, which does not apply where the employee was placed on notice that excess payment would have to be refunded. The Court also relied on the principle of unjust enrichment under Section 72 of the Indian Contract Act, 1872.
Such recovery of the amounts paid by mistake to the appellants, in view of the undertakings given by them, did not warrant interference by the Single Judge.
The appellants, the Bench noted, had not contended that they were, as of right, entitled to the financial benefits that were erroneously withdrawn. The appeals were dismissed, with parties bearing their own costs.
How the pay was given and taken back
The appellants were lecturers and assistant professors who had been given Academic Grade Pay in October 2009. The Institute withdrew the benefit in January 2010 and ordered recovery, on the footing that the teachers did not have the required years of service. Each of them had earlier furnished a written undertaking to refund any excess amount if the pay fixation later turned out to be erroneous.
Their answer was clause (v) of paragraph 18 of State of Punjab v. Rafiq Masih, which bars recovery where it would be iniquitous. The payments, they argued, were made voluntarily by the employer, without any misrepresentation or fault on their part.
Why the judgment matters
Employees often rely on the protection against recovery of excess payments recognised in Rafiq Masih. This ruling marks the limit of that protection: it does not reach a case where the employee signed an undertaking to refund any excess amount at the time of the benefit.
Public institutions can read the decision as confirming that a carefully drafted undertaking at the time of pay fixation can sustain later recovery. Employees can read it as a reminder that such an undertaking carries real legal consequences.
Case Title: Dr. M.K. Ravi Varma and Others v. National Institute of Technology and Others [Civil Appeal Nos. 8329-8336 of 2016; 2026 INSC 1080]
Bench: Justice Dipankar Datta and Justice Sheel Nagu, Supreme Court of India
Date of Judgment: September 23, 2026