Higher Salary Mistakenly Credited To Employee Cannot Be Recovered, But Employee Cannot Seek Continuation of Erroneous Benefits: J&K High Court

Srinagar: The Jammu and Kashmir High Court has held that the claim of the petitioners to avail the benefit of a mistake of fact, despite the mistake having been detected and corrected, is totally misconceived and cannot be accepted.

The petitioners had argued that higher pay scale came to be granted to them without fraud or misrepresentation and therefore the respondent could not refix the salary in lower pay-scale or recover the same.

A bench of Justice Sanjeev Kumar and Justice Puneet Gupta, as per Live Law, said that although the contention of the petitioner was right to the extent that the excess amount could not be recovered as there was no fraud on the part of petitioners in getting higher pay scale, the respondents cannot be prevented from refixing the salary after the amount erroneously transfered was withdrawn by the beneficiary employees.

The respondent had argued that the pay benefit was given based on SRO 59 of 1990, which was withdrawn in 1996. It was submitted that the petitioners had signed affidavits agreeing to return benefits if found ineligible later, and as per government circulars, the benefit was erroneously extended, and correction was lawful.

The court noted it was never disputed by the petitioners that the benefits were given due to a mistake of fact and were also capable of correction by the employee. It added that the petitioners never claimed entitlement under SRO 59 (by which higher pay was granted) or challenged its withdrawal.

The court said that the Tribunal had rightly held that while refixation of pay is permitted to correct errors made by the employee due to a mistake of fact but recoveries from those nearing retirement violate the principles laid out by the Supreme Court in Rafiq Masih’s case.

The High Court thus upheld the Tribunal’s judgment allowing the government to refix pay, but barred recovery of past payments already disbursed to the petitioners. The court said that Public employers can correct mistakes, but must do so without causing undue hardship.