Case Note & Summary
The petitioners, 13 employees of Thane Municipal Corporation, filed a writ petition challenging the Corporation's decision to recover excess salary paid to them due to wrong fixation of pay scales. The petitioners were initially appointed in various lower posts and were later granted higher pay scales erroneously following the implementation of the Sixth Pay Commission recommendations. The Corporation issued a circular in 2015 seeking to recover the excess amounts paid from 2008 onwards. The petitioners argued that they were not at fault and that the recovery was barred by the principle of no recovery from employees in lower posts. The Court examined the facts and found that the petitioners had signed the pay fixation orders and were aware of the higher pay scales. The Court held that the principle of no recovery does not apply when the employee had knowledge of the mistake. Additionally, the Court noted that the wrong fixation was a continuing wrong, as excess payments were made each month, and thus the Corporation could recover amounts within the limitation period. The Court dismissed the petition, upholding the recovery.
Headnote
A) Service Law - Recovery of Excess Salary - Wrong Fixation of Pay Scales - Recovery Permissible - The petitioners, employees of Thane Municipal Corporation, were granted higher pay scales erroneously due to a mistake in the implementation of the Sixth Pay Commission recommendations. The Corporation sought to recover the excess amount paid over several years. The Court held that recovery is permissible when the employee had knowledge of the error or when the mistake is a continuing wrong, and the principle of no recovery from employees in lower posts does not apply if the employee was aware of the mistake. (Paras 1-38) B) Service Law - Principle of No Recovery - Applicability - The principle that no recovery should be made from employees in lower posts for excess payments made due to employer's mistake, as laid down in various Supreme Court judgments, is not an absolute rule. It applies only when the employee was not at fault and had no knowledge of the mistake. In the present case, the petitioners were aware of the wrong fixation as they had signed the pay fixation orders and had been receiving higher salaries for years. (Paras 20-30) C) Service Law - Continuing Wrong - Recovery of Excess Salary - The Court distinguished between a one-time mistake and a continuing wrong. The wrong fixation of pay scales resulted in recurring excess payments each month, constituting a continuing wrong. Therefore, the Corporation was entitled to recover the excess amounts paid within the period of limitation. (Paras 31-35)
Issue of Consideration
Whether the Thane Municipal Corporation was justified in recovering excess salary paid to the petitioners due to wrong fixation of pay scales, and whether the petitioners were entitled to protection from recovery on grounds of no fault on their part.
Final Decision
The High Court dismissed the writ petition, upholding the Corporation's decision to recover the excess salary paid to the petitioners.
Law Points
- Recovery of excess salary
- wrong fixation of pay scales
- principle of no recovery
- knowledge of mistake
- continuing wrong
- Article 226 of Constitution of India
