WPSS/1695/2023 of GHYAMSHYAM ATWAL Vs STATE BANK OF INDIA

HIGH COURT OF UTTARAKHAND AT NAINITALHON’BLE SRI JUSTICE MANOJ KUMAR TIWARIWrit Petition Service Single No. 1695 of 202324 September, 2025

Ghyamshyam Atwal --Petitioner

Versus

State Bank of India & others --Respondents-------------------------------------------------------------------Presence:-

Mr. Sanjay Bhatt, Advocate for the petitioner.

Mr. Dharmendra Barthwal, Advocate for the respondents

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JUDGMENT

Petitioner was enrolled in Indian Army. After serving for nearly two decades, he retired from the rank of Havaldar on 31.3.2005. He thereafter applied for the post of Armed Guard, pursuant to an advertisement issued by State Bank of India and after selection, he was appointed as Armed Guard w.e.f. 17.12.2009 and he retired from the post of Head Guard from the bank on 31.3.2025.

2. By means of this writ petition, petitioner has

sought the following reliefs:-

“i- writ, order or direction in the nature of certiorari to quash the impugned decision dated 10-02-2023 (copy Annexure No. 9 to the Writ Petition) along with consequential pay reduction and recovery orders dated 02-05-2023 and 03.05.2023 (copy Annexure No. 10 and 11 to the Writ Petition).

ii- writ, order or direction in the nature of mandamus upon the Respondents to pay the arrears of difference of salary for the period between December 2009 to November 2011 with interest and to pay the salary for the month of May 2023 onwards and not to proceed any further for recovery of amount from the Petitioner pursuant to impugned orders dated 10-02-2023, 02-05-2023 and 03-05-2023.” mandamus upon the Respondents to pay the arrears of difference of salary for the period between December 2009 to November 2011 with interest and to pay the salary for the month of May 2023 onwards and not to proceed any further for recovery of amount from the Petitioner pursuant to impugned orders dated 10-02-2023, 02-05-2023 and 03-05-2023.”

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3. Annexure-9 to the writ petition is communication issued by Regional Manager on 10.2.2023, in which it is mentioned that at the time of his retirement from Indian Army, petitioner was getting `4,500/- as basic pay, `2,300/- as dearness pay and ` 1,156 as dearness allowance, total `7,956/-, therefore his basic pay at the time of appointment in State Bank of India should have been fixed at `5,500/-; while, basic pay of petitioner was fixed at higher level after appointment in the bank, which needs to be corrected and recovery of the excess payment has to be made by HRMS, as per the calculation mentioned in the letter.

4. Annexure-10 is the e-mail issued by Manager, HRMS, New Delhi to Branch Office, Tanakpur (Champawat), wherein it is mentioned that sum of `20,01,690.25/- has to be recovered from the petitioner or else petitioner’s P.F. number will be locked; no salary and allowance will be paid to him; Branch Manager will not be able to make his attendance and his leave also cannot be applied thereafter.

5. Annexure-11 is the letter issued by Branch Manager, State Bank of India, Tanakpur Branch on 3.5.2023, in which after referring to the e-mail dated 2.5.2023 received from Manager, HRMS, New Delhi, Branch Manager informed the petitioner about the recovery, which has to be made from him and advised him to make arrangement in his salary account so that the amount, which is to be recovered, can be realized.

6. Mr. Dharmendra Barthwal, learned counsel appearing for the bank submits that due to mistake by the bank authorities, petitioner’s basic pay at the time of appointment was fixed at much higher level than what

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he was eligible for. He submits that since petitioner’s basic pay at the time of retirement was fixed at `4,500/-, therefore, at the time of his appointment in the bank w.e.f. 17.12.2009, his basic pay was liable to be fixed at `5,500/-. Mr. Barthwal refers to paragraph no. 8 of the counter affidavit filed by Mr. Himanshu Joshi, Manager, H.R. & Admn., Region-3, Pithoragarh, where it is stated that petitioner’s basic pay was erroneously fixed by Chief Manager (Admn./Rural) as `11,350/- w.e.f. 17.12.2009, and consequently his basic pay as on 1.12.2017 was erroneously fixed as `21,165/-. He submits that since the excess payment released to the petitioner was on account of erroneous pay fixation, therefore, the bank is well within its right to recover the excess amount, wrongly paid to the petitioner.

7. Mr. Barthwal further submits that the amount, which is sought to be recovered was released only on 6.10.2021 and as soon as the bank authorities realized the mistake, instructions for recovery of excess amount was issued on 10.2.2023. He submits that it is just correction of mistake and in view of provision contained in Section 72 of Indian Contract Act, petitioner cannot retain the excess amount erroneously released to him. He relies upon judgment rendered by Apex Court in the case of Chandi Prasad Uniyal and others v. State of Uttarakhand and others, reported in (2012) 8 SCC 417.

8. Per contra, Mr. Sanjay Bhatt, learned counsel for the petitioner submits that after retiring from Indian Army, petitioner applied for appointment as Armed Guard and after appointment, his pay was fixed at certain level based on basic pay received by petitioner at the time of his retirement. He submits that petitioner had

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furnished correct information about his basic pay in Indian Army and had also produced all necessary documents, therefore, the bank authorities decided to grant him particular basic pay; the said decision was taken in view of the policy/circulars issued by the competent authority in the bank.

9. Learned counsel for the petitioner thus submits that the allegation that amount, in excess of what petitioner was entitled, was released, is incorrect. He further submits that it is nobody’s case that petitioner was responsible in any manner for getting the excess amount released in his favour nor there is any allegation that petitioner played fraud upon the bank authorities. Thus, he submits that if the competent authority in the bank has decided to fix the basic pay of the petitioner at particular level, the bank cannot then recover that amount by contending that it was wrongly paid to petitioner.

10. Learned counsel for the petitioner relies upon paragraph no. 18 of the law declared by Apex Court in the Case of State of Punjab and others v. Rafiq Masih (White Washer) and others, reported as (2015) 4 SCC 334, which is extracted below:-

“18. It is not possible to postulate all situations of hardship which would govern employees on the issue of recovery, where payments have mistakenly been made by the employer, in excess of their entitlement. Be that as it may, based on the decisions referred to hereinabove, we may, as ready reference, summarise the following few situations, wherein recoveries by the employers, would be impermissible in law: hardship which would govern employees on the issue of recovery, where payments have mistakenly been made by the employer, in excess of their entitlement. Be that as it may, based on the decisions referred to hereinabove, we may, as ready reference, summarise the following few situations, wherein recoveries by the employers, would be impermissible in law:

(i) Recovery from the employees belonging to Class III and Class IV service (or Group and Group service). III and Class IV service (or Group and Group service).

(ii) Recovery from the retired employees, or the employees who are due to retire within one year, of the order of recovery. employees who are due to retire within one year, of the order of recovery.

(iii) Recovery from the employees, when the excess payment has been made for period in excess of five years, before the order of recovery is issued.

(iv) Recovery in cases where an employee has wrongfully been required to discharge duties of higher post, and has been paid accordingly, even though he should have rightfully been required to work against an inferior post.

(v) In any other case, where the court arrives at the conclusion, that recovery if made from the employee, would be iniquitous or harsh or arbitrary to such an extent, as would far outweigh the equitable balance of the employer's right to recover.

11. Learned counsel appearing for the bank submits that since the excess payment was released to the petitioner only in the year 2021, therefore, the bank is well within its right to recover the excess amount paid to him, as it is well within ten years period. In support of this contention, he relies upon the judgment rendered by Apex Court in the case of Thomas Daniel v. State of Kerala, reported as 2022 SCC OnLine SC 536. Paragraph no. 15 of the said judgment is reproduced below:-

“15. Having regard to the above, we are of the view that an attempt to recover the said increments after passage of ten years of his retirement is unjustified.”

12. In the case of Jagdish Prasad Singh v. State of Bihar and others, reported as (2024) SCC OnLine SC 1909, Hon’ble Supreme Court has held as under:-

“21. We firmly believe that any decision taken by the State Government to reduce an employee's pay scale and recover the excess amount cannot be applied retrospectively and that too after long time gap. In the case of Syed Abdul Qadir v. State of Bihar[1], this Court held that when the excess unauthorised payment is detected within short period of time, it would be open for the employer to recover the same. Conversely, if the payment had been made for long duration of time, it would be iniquitous to make any recovery. The relevant paras of the Syed Abdul Qadir (supra) are extracted hereinbelow : -

“57. This Court, in catena of decisions, has granted relief against recoveryof excess payment of emoluments/allowances if (a) the excess amount was not paid onaccount of any misrepresentation or fraud on

the part of the employee, and (b) if suchexcess payment was made by the employerby applying wrong principle for calculatingthe pay/allowance or on the basis of particular interpretation of rule/order, which is subsequently found to be erroneous.

58. The relief against recovery is granted by courts not because of any right in the employees, but in equity, exercising judicial discretion to relieve the employees from the hardship that will be caused if recovery is ordered. But, if in given case, it is proved that the employee had knowledge that the payment received was in excess of what was due or wrongly paid, or in cases where the error is detected or corrected within short time of wrong payment, the matter being in the realm of judicial discretion, courts may, on the facts and circumstances of any particular case, order for recovery of the amount paid in excess.

59. Undoubtedly, the excess amount that has been paid to the appellant teachers was not because of any misrepresentation or fraud on their part and the appellants also had no knowledge that the amount that was being paid to them was more than what they were entitled to. It would not be out of place to mention here that the Finance Department had, in its counter-affidavit, admitted that it was bona fide mistake on their part. The excess payment made was the result of wrong interpretation of the Rule that was applicable to them, for which the appellants cannot be held responsible. Rather, the whole confusion was because of inaction, negligence and carelessness of the officials concerned of the Government of Bihar. Learned counsel appearing on behalf of the appellant teachers submitted that majority of the beneficiaries have either retired or are on the verge of it. Keeping in view the peculiar facts and circumstances of the case at hand and to avoid any hardship to the appellant teachers, we are of the view that no recovery of the amount that has been paid in excess to the appellant teachers should be made.”

(emphasis supplied)

22. Similarly, this Court in ITC Limited v. State of Uttar Pradesh2, held as under : -

“108. We may give an example from service jurisprudence, where principle of equity is frequently invoked to give relief to an employee in somewhat similar circumstances. Where the pay or other emoluments due to an employee is determined and paid by the employer, and subsequently the employer finds, (usually on audit verification) that on account of wrong

understanding of the applicable rules by the officers implementing the rules, excess payment is made, courts have recognised the need to give limited relief in regard to recovery of past excess payments, to reduce hardship to the innocent employees, who benefited from such wrong interpretation.”

(emphasis supplied)”

13. Mr. Dharmendra Barthwal, learned counsel appearing for the bank relies upon paragraph no. 14 of the judgment rendered by this Court in Writ Petition (S/S) No. 335 of 2023, which is extracted below:-

“14. Be that as it may. From the aforesaid judgments, it is clear that excess amount, if paid to an employee, would be recoverable (i) only when the employee concerned is in any manner responsible for such excess payment, e.g. by playing fraud or by adopting other deceitful means; or (ii) where an employee has given an undertaking before grant of such monetary benefit to the effect that in case the amount paid to him is found to be not admissible or is found to be in excess of what is due to him, then he will refund such amount/excess amount.”

14. By relying on the said judgment, learned counsel appearing for the bank submits that employer cannot be restrained from making recovery of the excess payment from an employee, if the employee is, in any manner responsible for excess payment e.g. by playing fraud or by adopting other deceitful means or where an employee has given an undertaking before grant of such monetary benefit to the effect that, in case the amount paid to him is later found to be not admissible or is found to be in excess of what is due to him, then he shall be liable to refund such excess amount.

15. An employee, who has succeeded in fraudulently receiving excess payment cannot be permitted to retain such excess amount. Similarly, an employee who gives an undertaking that he will be liable for refund of the excess amount before receiving the amount which is later found to be in excess, cannot claim

protection against recovery, if the undertaking given by him was before payment of such excess amount.

16. In such view of the matter, the writ petition is decided in terms of judgment dated 18.9.2025 rendered in Writ Petition (S/S) No. 335 of 2023 and other connected petitions. Petitioner shall be at liberty to challenge re-fixation or reduction of basic pay in separate proceedings. The Deputy Manager, B&O, State Bank of India, Haldwani is directed to do the needful, within six weeks from the date of presentation of certified copy of this order.

(Manoj Kumar Tiwari, J.)Dt: 24.09.2025 NavinNAVEEN CHANDRADigitally signed by NAVEEN CHANDRA DN: c=IN, o=HIGH COURT OF UTTARAKHAND, ou=HIGH COURT OF UTTARAKHAND, 2.5.4.20=3be23325146e76a0642bdf4943fb9046f487df006da82a131bb4e4403d3c0a15, postalCode=263001, st=UTTARAKHAND, serialNumber=18167EEFB5CA8CFFD421A103819DA875643AF56D653D095C6ED9A86DAAB21CE5, cn=NAVEEN CHANDRA Date: 2025.10.09 10:00:02 +05'30'