Summary
A Madhya Pradesh order of 26.08.2008 gave specialist doctors and dental specialists higher pay scales after six years' service. A circular of 23.05.2009 extended the benefit by counting service notionally from the date of appointment. It was issued without competence and without Finance Department concurrence, and was withdrawn on 30.05.2012, after which the State sought to recover the excess paid, with interest. The High Court's Division Bench upheld both the withdrawal and the recovery. The Supreme Court upheld the withdrawal but barred recovery. The employees made no misrepresentation, the mistake was the State's own, and some had retired and would suffer recovery from pension. Pay and pension are to be refixed under the 2008 order as if the 2009 circular had never issued.
Issues
- Whether the State could withdraw a pay-scale circular issued without competence and without Finance Department concurrence
- Whether excess pay received by employees under that circular, without any misrepresentation on their part, could be recovered with interest
Held
- The 2009 circular was issued without authority and without the Finance Department's approval despite its financial implications. The State was justified in withdrawing it, and the Division Bench rightly upheld the withdrawal. (¶¶ 2, 4)
- The employees made no misrepresentation and the mistake was entirely the State's in issuing the circular and paying under it. Although Rafiq Masih may not strictly apply, recovery of the excess paid between 2009 and 2012 with interest was unjustified, particularly as some had retired and recovery would fall on their pensions. (¶¶ 4.1, 5)
- For all other purposes, including pay fixation and pension, the employees' entitlements must be worked out under the order of 26.08.2008 as if the 2009 circular had never been issued. (¶¶ 5, 6)
Result
Appeals partly allowed; the withdrawal of the 2009 circular was upheld, but recovery of the excess paid up to 30.05.2012 with interest was quashed, with pay and pension to be fixed under the order of 26.08.2008; no costs.