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RAJENDRA ALEXANDER & ORS. vs UNION OF INDIA & ANR.

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* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 3rd February, 2025
+ W.P.(C) 8932/2023 & CM APPL. Nos. 33857/2023, 47649/2023, 57209-10/2023, 62454-56/2023, 5777/2024, 11268/2024, 19186/2024
RAJENDRA ALEXANDER & ORS. …..Petitioners
Through: Mr. Sanjoy Ghose, Senior Advocate with Mr. Ritesh Khatri and Mr. Rohan Mondal, Advocates.

versus
UNION OF INDIA & ANR. …..Respondents
Through: Mr. Shekhar Vyas and Ms. Neha Warrier, Advocates for Respondent No.1.
Mr. Jayant K. Sud, Senior Advocate with Mr. Divyanshu Srivastava, Mr. Lokesh Sinhal, Ms. Shayal Anand, Mr. Kartik Jasra, Mr. Sai Manik Sud, Mr. Prannit Stefano A. and Mr. Gaurav Mehgwal, Advocates for Respondent No.2.

CORAM:
HON’BLE MS. JUSTICE JYOTI SINGH
JUDGEMENT
JYOTI SINGH, J.
1. This writ petition is preferred on behalf of the Petitioners laying a challenge to Office Order No.41/2020 dated 17.04.2020 and Circular dated 07.09.2020. Direction is sought to restrain Respondent No. 2/National Hydroelectric Power Corporation Limited (‘NHPCL’) from initiating any recovery against the Petitioners in furtherance of the impugned order/ circular and to restore the superannuation medical benefits and renew the medical cards in favour of the Petitioners.
2. Facts to the extent necessary are that Petitioners are retired employees of NHPCL, a Public Sector Undertaking under Respondent No.1. Petitioners joined NHPCL on different dates between 1971 to 1999 as per the details furnished in the writ petition. In the year 1990, the Supreme Court in a pending litigation directed that all employees of NHPCL appointed on or after 01.01.1989 will be governed by such pay scales and allowances as may be decided by the Government of India (‘GoI’) in its discretion and accordingly, vide order dated 07.05.1992, NHPCL decided that all employees appointed in 1989 will be allowed High Power Pay Committee (‘HPPC’) pay scales and related benefits.
3. A circular was issued by NHPCL bearing No.12/93 dated 19.05.1993 adopting the pay scales, allowances and other perquisites on Industrial Dearness Allowance (‘IDA’) pattern w.e.f. 01.01.1989 in respect of employees (excluding Board level functionaries), appointed or promoted on or after the said date. Clause 3.1 provided an option to the existing employees to opt for the IDA pattern and related scales of pay and accordingly, most of the Petitioners switched over to IDA scales exercising irrevocable option as offered by NHPCL in 1996. Department of Public Enterprises (‘DPE’) issued an O.M. dated 25.06.1999 revising the pay scales in respect of Board level and below Board level Executives and non-unionized Supervisors of Central Public Sector Enterprises (‘CPSEs’) w.e.f. 01.01.1997, pursuant to recommendations of Justice S. Mohan Committee set up by GoI to recommend revision of pay and allowances for these Executives. Para (4) of the O.M. provided for grant of maximum three stagnation increments for those who reached the maximum of their scales. Para (7) provided that pay revision would be subject to Presidential Directives and para (13) envisaged a Mediclaim cover through Insurance Companies for the retired employees and provided that the said policies would be funded from collateral contributions from both employees and organisations. The revised pay scales were provided in Annexure-I to the O.M. dated 25.06.1999.
4. On 21.01.2000, an Office Order No.3/2000 was issued by NHPCL conveying its decision to implement the revised pay scales, fitment formula and DA guidelines in terms of O.M. dated 25.06.1999 issued by DPE. The revised pay scales were incorporated in the office order. In respect of stagnation increments, it was provided in para (6) that employees who reached the maximum of the scales of pay shall be granted upto a maximum of three stagnation increments, but there was no mention of periodicity for grant of increments. It is averred that Respondent No.1/Ministry of Power accorded approval to the proposal of NHPCL for revision of pay scales vide letter dated 04.04.2006 w.e.f. 01.01.1997 with increased rates of increments and informed NHPCL that Ministry had no objection to the adoption of revised pay scales being considered by NHPCL insofar as the range of pay scales was in line with the scales prescribed by DPE on the basis of recommendations of Justice S. Mohan Committee.
5. It is further averred that revised pay scales were implemented by NHPCL vide Office Order No.22/2006 dated 09.05.2006 on IDA pay pattern and the revised pay scales were provided in para (1) of the order. Para (9) of the said order again provided for three stagnation increments and it was specifically stipulated that stagnation increment was to be released on the anniversary date of the increment and paid as Stagnation Pay. It was also provided that if the basic pay and special pay of an employee reaches the maximum of the pay scale at any time during the period 01.01.1997 to 31.12.2006, he will be allowed stagnation increments at the rate of increment last drawn, on his due date of increment. There was no mention of any period for grant of stagnation increments.
6. After the pay scales were revised under 1997 pay structure, DPE issued an O.M. dated 26.11.2008, recommending pay revision w.e.f. 01.01.2007 and NHPCL implemented the recommended revised pay scales from 01.01.2007 and allowances w.e.f. 26.11.2008, provisionally, vide Office Order No.46/2010 dated 02.11.2010. It was provided in para 1.3 of the order that pay of Executives on the rolls of NHPCL on 31.12.2006 shall be re-worked notionally in the pay scales as provided in Column 3 of the Table in Annexure-1 w.e.f. 01.01.1997 to 31.12.2006 and based thereon, pay shall be fixed on 01.01.2007 in the revised pay scales as at Column 4 and other conditions regulating the pay shall remain unchanged. Para 2.1(d) provided protection of actual emoluments drawn and para 21 provided that with regard to payments already made to employees on account of salaries following modified pay scales from 01.01.1997 to 31.12.2006, there will be no payment/recovery on account of re-working of pay notionally in the pay scales with DPE increments w.e.f. 01.01.1997, till further orders. By the same order, officers in E-7 (Chief Engineer/Chief) and E-8 (General Manager) grades in the pre-revised scales of Rs.19500-25600 and Rs.20500-26500, respectively were placed in the same scale of Rs.51300-3%-73000 and given promotion benefits in terms of para 3 of ‘Pay on Promotion’ as prescribed in Personnel Manual of NHPCL.
7. It is averred that separate Office Order was issued on 27.12.2013 by Respondent No. 1 stating that deviant pay scales fixed w.e.f. 01.01.1997 shall not be regularized, however, no recovery shall be made for the excess pay drawn from 01.01.1997 onwards considering the difficulties in effecting recoveries and also that such recoveries may de-motivate the staff. By O.M. dated 03.08.2017, DPE issued orders for pay revision w.e.f. 01.01.2017 for Board level and below Board level Executives and non-unionized Supervisors of CPSEs. Since Presidential Directive was issued, NHPCL implemented the pay revision w.e.f. 01.01.2017 vide Office Order dated 30.05.2018 again providing for increments, stagnation increments and superannuation benefits. With Cabinet approval, Respondent No.1 regularised the adopted pay scales of below Board level Executives w.e.f. 01.01.1997 vide order dated 29.01.2019 in four PSEs i.e. NHPCL, SJVN Ltd., NEEPCO Ltd. and THDCIL and pursuant thereto, NHPCL issued Office Order dated 19.03.2019 and regularized the pay scales of below Board level Executives w.e.f. 01.01.1997. Significantly, scales of pay w.e.f. 01.01.1997 adopted in pursuance of order of the Ministry dated 04.04.2006 and implemented vide order dated 09.05.2006 were categorically regularized. Consequently, provisional revised pay scales w.e.f. 01.01.2007 as implemented vide order dated 02.11.2010 were also regularized. In para 2.2 of order dated 19.03.2019, it was stipulated that conditions regulating the pay such as fitment methodology, rate of annual increment, etc. for the period 01.01.2007 to 31.12.2016 shall remain unchanged. In the meantime, Petitioners retired on different dates between 2008 to 2019.
8. It is averred in the writ petition that albeit both the 1997 and 2007 pay structures were regularized and the chapter was closed, however, on account of representations received from some Executives pointing out a pay anomaly, whereby their juniors were receiving higher pay, an internal Committee was constituted headed by Sh. A.K. Singh, the then E.D., NHPCL, which submitted its report on 21.08.2019 to the CMD. Basis this report, NHPCL issued Office Order No.41/2020 dated 17.04.2020 implementing the recommendations of the Committee and carrying out amendments in the 1997 and 2007 pay structures as follows:-

“1. Promotion of Executives from Chief/Chief Engineer (E-7 grade) to the post of General Manager (E-8 grade) in the same pay scale of 51300-3%-73000 shall be treated as redesignation, thus the promotional benefit of notional increment granted if any on such re-designation from Chief (E-7) to General Manager (E-8) in the same pay scale of 51300-3%-73000 in the 2007 pay structure shall be withdrawn w.e.f 01.01.2007. Accordingly the Stagnation Increments which was withdrawn in the 2007 pay structure on such promotion shall be restored.
2. Increment, if any, falling due on 01.01.2007 shall be granted first in the pre-revised pay scale (1997 pay revision) and only thereafter fitment benefit shall be granted, and pay fixed in the revised pay scales as on 01.01.2007. Accordingly clause 3.1 of Part-I Office Order No: 46/2010 dt: 02.11.2010 stands amended to above extent.
3. Stagnation increment shall be granted once in two years on reaching the maximum of the pay scale in the 1997 pay structure i.e during the period from 01.01.1997 to 31.12.2006, thus clause 9 of the of Part-I Office Order No: 2212006 dt: 09.05.2006 shall stand amended to above extent.
4. Employees who have been appointed on or after 01.01.1989 and continued in CDA pay scales, shall be placed in IDA Pay Scales retrospectively from the date of their initial appointment in pursuance to Part-I Office Order No: 23/90 dt:10.07.1990 & Office Order No: 12/93 dt: 19.05.1993.
Other terms and conditions of above mentioned office orders shall remain unchanged. Pay fixation of employees shall be reviewed in the light of aforesaid decisions and regulated accordingly.”

9. Basis the Office Order dated 17.04.2020, the Finance Division of NHPCL carried out re-fixation of the pay even in case of retired employees and drew up a due-drawn statement from 01.01.1997 onwards thereby giving retrospective effect to the said order resulting in recoveries from large number of employees for the past period including retired employees, such as the Petitioners. In furtherance to order dated 17.04.2020, NHPCL issued Circular No. 492 dated 07.09.2020 prescribing the mode of recovery from retired employees inter alia directing that the HR Division shall issue notices to all ex-employees who failed to deposit the amounts and will initiate legal action to make recoveries. Individual notices were sent to the employees in this regard.
10. It is further stated that some of the Petitioners received notices of recovery and chose to reply while some did not even receive the notices. Some Petitioners approached Respondent No. 1 and NHPCL representing against recoveries but there was no positive response and vide letter dated 23/24.05.2023, Petitioners were again asked to deposit the alleged excess amounts, failing which their medical facilities will be stopped or suspended. This was based on a complete misreading of Rule 3.2.3(d) of NHPCL Retired Employees Health Scheme (‘REHS’) and this triggered the filing of the present writ petition. Be it noted that when the writ petition was listed for admission on 06.07.2023, Court stayed recoveries from the Petitioners in light of the judgment of the Supreme Court in State of Punjab and Others v. Rafiq Masih (White Washer) and Others, (2015) 4 SCC 334, and the interim order continues till date.
11. Mr. Sanjoy Ghose, learned Senior Counsel for the Petitioners raised the following contentions:-
(a) Impugned order dated 17.04.2020 has been issued by NHPCL without due approval of Respondent No.1 and is without jurisdiction. NHPCL is seeking to recover stagnation increments granted to the Petitioners from 01.01.1997 to 31.12.2006 and withdraw the fixation benefits on promotion to the post of General Manager as also change the methodology of grant of increments due on 01.01.2007 for the purpose of pay fixation, whereas the benefits were granted to the Petitioners after due approval of the Board of NHPCL as per the then prevalent Rules. There are no allegations of fraud or misrepresentation against the Petitioners for issuing earlier office orders and/or in receiving arrears of stagnation increments, promotion benefits and deciding pay fixation methodology and therefore, no recoveries can be made from them.
(b) Albeit on merits, the impugned order dated 17.04.2020 is illegal and re-fixation cannot be sustained in law, assuming for the sake of argument that the re-fixation is correct, no recoveries can be made from the Petitioners, who are retired employees, in light of the judgment of the Supreme Court in Rafiq Masih (supra), wherein the Supreme Court held that recovery from retired employees will be impermissible in law. Relying on the judgment of the Supreme Court in Syed Abdul Qadir and Others v. State of Bihar and Others, (2009) 3 SCC 475, it was observed that it is apparent from the conclusions drawn in the said judgment that recovery of excess payments made from employees who have retired from service or are close to their retirement, would entail extremely harsh consequences outweighing the monetary gains by the employer. The Supreme Court further observed that it cannot be forgotten that a retired employee or an employee about to retire, is a class apart from those who have sufficient service to their credit before their retirement and in this backdrop, recovery from retired employees was held to be impermissible. In this context, reliance was also placed on the judgments of the Division Benches of this Court in Dilbagh Singh Bains v. Delhi Development Authority and Others, 2023 SCC OnLine Del 1404; Govt. of NCT of Delhi and Others v. Mohinder Singh Siwach, 2023 SCC OnLine Del 5871, as also of this Court in D.C. Murmu v. Union of India and Others, 2023 SCC OnLine Del 1753. Reliance was placed on the judgment of the Supreme Court in M.P. Medical Officers Association v. State of Madhya Pradesh and Others, 2022 SCC OnLine SC 1099, wherein the Supreme Court held that since there was no misrepresentation by the employees and the mistake, if any, was of the department who issued the circular in question under which benefits were given, recovery was not justified, more so, when some of the employees had retired on superannuation and recovery shall have to be effected from their pensionary benefits.
(c) Petitioners are drawing meagre amount of pensions from Employees’ Pension Scheme, 1995 (‘EPS-95’) ranging from Rs.969/- to Rs.3,600/- per month and annuity from LIC on account of superannuation scheme as per 2007 revision, ranging from Rs.382/- to Rs.20,650/- per month and it would be wholly iniquitous to permit the impugned recoveries. Petitioners are also squarely covered under paragraph 18(v) of the judgment in Rafiq Masih (supra), wherein the Supreme Court held that where the Court arrives at a 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 employer’s right to recover, recovery would be impermissible. In the present case, the prime contention of the Petitioners is that the recoveries are illegal as benefits of the pay revisions and stagnation increments were correctly disbursed but assuming that there is an alleged anomaly, recoveries cannot be made at this stage from the retired employees. NHPCL has been unable to make out a case that stagnation increments were payable once in two years under the 1997 and 2007 pay revisions. Insofar as withdrawal of promotion increments on account of treating the movement from E-7 to E-8 grade as re-designation is concerned, the decision was taken for the first time vide order dated 17.04.2020 and cannot be applied retrospectively to re-fix the pay and consequently the pension of the Petitioners.
(d) Even otherwise, the impugned order dated 17.04.2020 is illegal and arbitrary. Taking the Court to the backdrop, it was urged that vide O.M. dated 25.06.1999, DPE issued guidelines on pay revision with effect from 01.01.1997 for Board level posts and below Board level posts including non-unionised Supervisors in CPSEs. This O.M. provided for grant of upto a maximum of three stagnation increments for those who reach the maximum of their scales. Decision to implement revised pay scales was taken by NHPCL vide Office Order dated 21.01.2000. Respondent No.1 gave approval to implement the pay scales vide letter dated 04.04.2006 and for their adoption w.e.f. 01.01.1997 and while doing so, notice was taken of the proposal of the Board of NHPCL to remove anomalies. The revised pay scales were implemented vide order dated 09.05.2006 by NHPCL and clearly, in para 9, there was a stipulation for grant of three stagnation increments, to be released on the anniversary date of the increment. Therefore, at this stage, the issue of 1997 pay structure stood crystalized and finalized and was not vulnerable to a re-consideration. Moreover, after the Ministry of Power regularized the pay scales from 01.01.1997 vide order dated 29.01.2019, NHPCL issued an Office Order dated 19.03.2019 specifically stating that scales of pay w.e.f. 01.01.1997 implemented vide Office Order dated 09.05.2006 stand regularized. Significantly, this order categorically provided in para 9 for grant of three stagnation increments but no periodicity was mentioned. Having regularized the pay scales in terms of this order, there was no scope for amending para 9 by the impugned order dated 17.04.2020.
(e) DPE issued O.M. dated 26.11.2008 for pay revision w.e.f. 01.01.2007 for Board level and below Board level Executives including non-unionised Supervisors in CPSEs and vide order dated 02.11.2010, NHPCL implemented the revised pay scales w.e.f. 01.01.2007 by notionally re-working the pay of the Executives from 01.01.1997 to 31.12.2006 and in para 1.3, it was stipulated that all other conditions regulating the pay for this period shall remain unchanged and para 2.1(d) provided for protection of actual emoluments drawn.
(f) NHPCL had clearly provided the methodology for drawal of increments due on 01.01.2007 in Clause 3.1, where it was stated that increment due on 01.01.2007 shall be drawn in the revised pay scale. Para 21 provided that as regards payments already made to employees on account of salary, following modified pay scales from 01.01.1997 to 31.12.2006, there will be no payment/recovery on reworking of pay notionally in the pay scales with increments w.e.f. 01.01.1997, till further orders. When DPE issued O.M. dated 03.08.2017, revising the pay scales from 01.01.2017 of Board level and below Board level Executives including non-unionised Supervisors in CPSEs, being a Presidential directive, NHPCL implemented the pay revision w.e.f. 01.01.2017 vide Office Order dated 30.05.2018 and with Cabinet approval, Respondent No.1 vide letter dated 29.01.2019 regularised the adopted pay scales of below Board level Executives in four CPSEs, i.e. NHPCL, SJVN Ltd., NEEPCO Ltd. and THDCIL w.e.f. 01.01.1997. After regularisation, NHPCL issued order dated 19.03.2019, where in para 2.2, it was stipulated that conditions regulating the pay such as fitment methodology, rate of annual increment, etc. for the period 01.01.2007 to 31.12.2016 shall remain unchanged. After the said order and regularization of the pay scales by Respondent No.1, the nodal Ministry, without any authority and in the teeth of all the earlier orders, NHPCL erroneously issued the impugned order dated 17.04.2020 basis a Committee’s report, which was constituted for a limited purpose and had no power to make recommendations contrary to the orders of the Ministry regularizing the pay scales and closing the chapter vide letter dated 29.01.2019, which was duly implemented by NHPCL on 19.03.2019 and after which arrears were disbursed to Petitioners, who by then had retired and some of them as back in 2008 and 2009 etc. The impugned order is an internal decision of NHPCL and has no approval from the DPE and/or Ministry of Power.
(g) The genesis of the recovery are the representations received from some senior Executives who were purportedly receiving lesser pay than their juniors. Basis these representations, an internal committee was constituted, which submitted its report on 21.08.2019 to CMD, NHPCL. Based on this report, NHPCL issued Office Order No.41/2020 dated 17.04.2020 amending the 1997 and 2007 pay revisions structures, besides shifting to IDA scales for those few who joined in CDA scales on or after 01.01.1989. Pursuant to this, Circular No.492 dated 07.09.2020 was issued directing recoveries from serving as also retired employees. Individual recovery notices were also issued to the retired employees on three frivolous grounds: (a) stagnation increments were to be granted once in two years on reaching the maximum of the pay scale in the 1997 pay structure, i.e. for the period 01.01.1997 to 31.12.2006; (b) increments due on 01.01.2007 were to be calculated on pre-revised scale and after fitment, the pay should have been fixed in the revised pay scale; and (c) promotion from E-7 to the post of GM in E-8 Grade in the same pay scale of Rs.51,300-73,000 should be treated as re-designation and therefore, promotional benefit on notional increment be withdrawn and stagnation increments granted be restored. Erroneously and illegally, para 9 of Office Order dated 09.05.2006 was amended despite the regularization of the pay scales in terms of this order by NHPCL vide order dated 19.03.2019. The impugned order and the recovery notices cannot be countenanced in law after regularization of the pay scales by the Ministry under a Presidential directive and more so, when the O.Ms. and office orders provided no periodicity for grant of stagnation increments.
(h) Fulcrum of the case of NHPCL is that Petitioners and other effected employees had knowledge that both the pay scale revisions, i.e. 1997 and 2007 were provisional and interim in nature, for want of GoI approval, which came only in January, 2019 and that Petitioners had given undertakings to refund any excess payment. The foundation of the case of NHPCL is completely flawed. Perusal of Office Order No.3/2000 dated 21.01.2000 would show that while revising the existing pay scales of Executives and Supervisors w.e.f. 01.01.1997, in the table in para 1 of the order, there was a Note against E-1 and E-7 scales stating that they were provisional and subject to approval from GoI and only the incumbents of these posts were called upon to give undertakings in writing in the enclosed format, that in the event of any alteration or modification in the proposed revised pay scales or otherwise as decided by GoI, the same will be implemented and necessary adjustments will be made from arrears/future salary. Therefore, no other revised pay scale was provisional or contingent on any approval and significantly, even in case of provisional pay scales, adjustment was envisaged from arrears/future salary and not from retiral benefits, in case of any alteration in the pay scales, which never happened and thus the undertakings lost their value. Even otherwise, the undertakings were restricted to revisions in E-1 and E-7 pay scales and have nothing to do with the stagnation increments payable under the 1997 pay structure since no periodicity was mentioned in any order/O.M.
(i) There is another reason why no recovery can be made from the Petitioners. In para 21 of Office Order dated 02.11.2010, while revising the pay scales w.e.f. 01.01.2007, it was clearly stipulated that as regards payments already made to employees on account of salaries following modified pay scales from 01.01.1997 to 31.12.2006, there will be no recovery on account of re-working of pay notionally in the pay scales with increments w.e.f. 01.01.1997.
(j) Action of NHPCL in stopping the superannuation medical benefits of the Petitioners in the guise of recovery is unauthorized, arbitrary and illegal and based on gross misreading of Rule 3.2.3(d) of REHS, which provides that benefits under the Scheme shall not be admissible where the retired employee has not cleared his/her outstanding dues of the Corporation at the time of retirement or subsequently. The expression ‘subsequently’ only means pending dues at the time of retirement and not dues which allegedly become outstanding on account of some subsequent changes in a policy decision. Post-retirement medical facility is a part of superannuation benefits and was extended to employees under the 2007 pay revision vide DPE O.M. dated 26.11.2008. Para 15.0 of Office Order No. 46 of 2010 dated 02.11.2010 provides that superannuation benefits shall be paid @ 30% of revised Basic Pay and DA, which shall include EPF, Gratuity, Pension and Contributory Scheme of post-retirement medical facilities. It also provides that existing Contributory Scheme of retired employees and REHS for Executives shall continue to remain operative. This rule cannot be construed to stop the medical benefits under the Scheme by treating the amounts allegedly recoverable post-retirement on account of erroneous re-fixation of pay going back to 01.01.1997, as outstanding dues.
(k) NHPCL has not considered that at the time of superannuation, after clearing all outstanding dues and making payments of requisite membership of REHS, retired employees become members of the Scheme and therefore, invocation of para 3.2.3(d) which is applicable at the time of becoming member of the Scheme to effect recovery due to amendment in pay fixation rules after retirement, is wholly unjustified. Each of the Petitioners retired after clearing the dues and grant of ‘No Dues Certificate’ and thus there can be no impediment in the Petitioners’ enjoying the benefits under REHS. In pay revision w.e.f. 01.01.2007, CPSEs were allowed 30% of Basic Pay towards superannuation benefits which included CPF etc. and REHS Trust was created separately for investing and meeting liabilities of expenditure on this account and no law would permit stoppage of medical facilities.
12. Mr. Jayant K. Sud, learned Senior Counsel appearing on behalf of NHPCL raises the following contentions:-
(a) The issues raised in the present writ petition are no longer res integra and have been decided by the Punjab and Haryana High Court against the Petitioners in a batch of writ petitions with lead matter, titled Prabhu Kumar Rawat and Others v. National Hydroelectric Power Corporation Ltd. & Others, CWP 14979/2020, decided on 10.08.2021. Therefore, in light of the judgment of the Supreme Court in Prestige Lights Ltd. v. State Bank of India, (2007) 8 SCC 449, this writ petition deserves to be dismissed as Petitioners have not even disclosed that similar writ petitions stand dismissed.
(b) The anomaly in pay fixation can always be rectified as excess payments are a loss to the public exchequer being without any authority of law and a result of bona fide mistake of NHPCL. The pay scale revision for Executives w.e.f. 01.01.1997 was an ad hoc measure and provisional, awaiting approval from GoI and therefore, pay revision from 01.01.2007 was implemented only provisionally. The first anomaly that occurred in the pay fixation in the 1997 pay structure was that the three stagnation increments that were payable on reaching the maximum of the scale were granted every year instead of once in two years and thus, no infirmity can be found in the impugned order to the extent it rectified this glaring anomaly.
(c) Second anomaly sought to be rectified was with respect to promotion increments granted erroneously treating upward movement from E-7 and E-8 grades of executives as promotion, contrary to Government guidelines as per which no two grades can be placed in the same pay scale. The anomaly came to light when representations were received from some Executives in E-8 grade. An Anomaly Committee was constituted by NHPCL vide order dated 28.06.2019, wherein it was brought out by the representationists that on regularization of pay scales from 01.01.1997, most of the Executives who were stagnating at the maximum of the pay scale of Rs.51000-3%-73000 (E-7 Scale) or had drawn one or two or three stagnation increments, on their elevation as General Manager (E-8) in the same pay scale were suffering a loss of pay as their past service was ignored and stagnation increments drawn were taken away. As a result, juniors who were not promoted as GM in the 2007 pay structure, were drawing higher pay since their stagnation increments were carried forward for fixation of pay as on 01.01.2017. Committee recommended that promotion of Executives from E-7 to E-8 grade in the same pay scale shall be treated as re-designation and thus, promotional benefit of notional increment granted, if any, on such re-designation in the 2007 pay structure shall be withdrawn w.e.f. 01.01.2007 and stagnation increments withdrawn in 2007 pay structure on such promotion, shall be restored. This anomaly was sought to be rectified by the order dated 17.04.2020 and rightly so.
(d) The third anomaly was also rightly rectified. Increments, if any, falling due on 01.01.2007 were erroneously fixed on revised pay scales whereas they ought to have been granted first in the pre-revised pay scale i.e. 1997 pay revision and only thereafter fitment benefit was to be granted and pay fixed in the revised pay scales as on 01.01.2007. If an employer discovers that pay of an employee has been wrongly fixed or any other benefit has been wrongly granted, there can be no impediment in the way of the employer to refix the pay and correct the anomaly. It was explained that Petitioners cannot find fault with the order dated 17.04.2020 as the same is in consonance with DPE O.Ms. and/or the recovery notices which are consequential to re-fixation of pay.
(e) Petitioners were themselves working at the managerial and senior positions and were in the decision-making regime and ought to have facilitated in rectifying the anomalies instead of contesting the impugned decision. PSUs have complete autonomy to work out pay fixations and do not require Government approval for the same. Petitioners heavily rely on Office Order dated 21.01.2000 to contend that the pay structure was not provisional and only E-1 and E-7 Scales were provisional overlooking that this order was superseded by order dated 09.05.2006.
(f) In supersession of order dated 21.01.2000, NHPCL issued order dated 09.05.2006 implementing first pay revision from 01.01.1997 and it was provided in para 14 that modified pay structure will be effective from 01.01.1997, however, revised higher pay between 1997 to 2006 and consequential benefits, i.e., revised higher pay from first pay revision as feeder for second pay revision were never given. Both the benefits were given from back date in April-May, 2019 in the form of arrears, after DPE’s approval on 29.01.2019 and immediately, the recoveries were sought with no time lag. It was well known to the Petitioners and other employees that pay revision from 01.01.2007, pursuant to DPE O.M. dated 26.11.2008 was provisional and it was clearly provided in the order dated 02.11.2010 that revised implementation was subject to Government approval/regularization and recovery, if any, will be effected after regularization. Undertakings were furnished by the employees to refund the amounts received on account of pay revision w.e.f. 01.01.2007 and allowances from 26.11.2008, in case of recovery. Since, first pay revision was provisional and the second was also implemented provisionally, consequential benefits of higher feeder pay from 01.01.1997 were not allowed in 2007 pay revision.
(g) DPE issued O.M. dated 14.12.2012 during pendency of regularization of 1997 and 2007 pay scales and provided in para 5(i) that stagnation increments given in 1997 or 2007 pay scales should have been granted only after reaching maximum of the prescribed scale and once in two years with maximum three increments only. It was further provided in para 5(iii) that increments, if any, due on 01.01.2007 should be granted first in the pre-revised scale and thereafter, fitment should be granted and pay fixed in the revised scale as on 01.01.2007. DPE issued guidelines on 24.12.2012 that two grades should not have the same pay scale. Ministry of Power vide letter dated 27.12.2013 conveyed that deviant pay scales w.e.f. 01.01.1997 shall not be regularized. On 29.01.2019, Ministry of Power approved the proposal to regularize the adopted pay scales of below Board level Executives in 4 PSUs including NHPCL from 01.01.1997 and NHPCL gave effect to the approval vide order dated 19.03.2019. However, in exercise of pay fixation, DPE OMs dated 14.12.2012 and 24.12.2012 were not taken into account and as a result, stagnation increments were given every year besides higher fitment benefit and error in fixation in E-7 and E-8 Grades crept in. This resulted in excess amounts being paid to the employees including the Petitioners in April-May, 2019.
(h) Pay anomaly was brought to the notice of NHPCL and a High-Level Committee was constituted and based on its report, the impugned order was passed. This information was put on NHPCL’s website and intranet calling for objections from serving and retired Executives, but no objections were received. Accordingly, re-fixation was done and amounts to be recovered were computed. NHPCL also communicated the amounts to be refunded to the retired employees individually. The chronology of events shows that the action of NHPCL is in consonance with DPE O.Ms. and guidelines and if an error has occurred during pay revisions, which were provisional, there is no illegality in recovering the amounts.
(i) Case of the Petitioners in challenging the recoveries is predicated entirely on the principles elucidated by the Supreme Court in Rafiq Masih (supra), wherein the Supreme Court has held that recovery from retired employees is impermissible. However, this principle is inapplicable to the present case where Petitioners were in the first instance put to notice that any payment made in excess under the pay revisions, which were provisional, will be refunded and they had furnished undertakings in writing to this effect, without any protest or demur. O.Ms. of DPE regulating pay revisions were in the public domain and well known to the Petitioners. They were not ignorant of the undertakings given as well. Furthermore, para 18 (ii) of Rafiq Masih (supra) will not apply as it was in the context of only those retired employees who received excess payment first, then retired and recovery was sought after retirement on the reasoning that the recovery will be iniquitous as the earnings would have substantially dwindled or would be reduced on retirement. In the present case, Petitioners retired first and thereafter received huge arrears which were excess payments and within few months, recoveries were effected.
(j) Case of NHPCL is squarely covered by the judgment of Supreme Court in High Court of Punjab and Haryana and Others v. Jagdev Singh, (2016) 14 SCC 267, wherein the Supreme Court held that the principle that recovery from retired employees or those who are due to retire within one year of the order of recovery is impermissible, is inapplicable where an officer to whom payment was made in first instance was clearly put to notice that excess payment was liable to be refunded. Once Petitioners have given an undertaking while opting for revised pay scales that they would refund the excess amounts paid, they will be bound by the same as in the case of Jagdev Singh (supra).
(k) Much was argued by the Petitioners that having rendered a ‘No dues Certificate’ at the time of retirement of the Petitioners, NHPCL cannot seek any recovery and/or stop the benefits of the medical scheme. This is an incorrect submission as the Certificate only signified that till the time of retirement and with regard to transactions until retirement between employer and employee, accounts are settled and employee does not owe anything to the employer and naturally, this Certificate cannot come in the way of transactions post-retirement. The medical scheme i.e. REHS itself provides that where retired employee has not cleared all his/her outstanding dues of the Corporation at the time of retirement or subsequently, benefits under the scheme will not be available. Petitioners are conveniently ignoring the word ‘subsequently’ and since in the present case, the excess payments were made subsequent to the retirements, unless the outstanding dues are paid, medical benefits cannot be granted. If the interpretation of the Petitioners is to be accepted, the expression ‘subsequently’ will be rendered otiose.
13. Counsel for Respondent No.1 adopted the arguments canvassed on behalf of NHPCL and supported its case.
14. Heard learned Senior Counsels for the Petitioners and NHPCL and learned counsel for Respondent No.1.

15. By this writ petition, writ Petitioners lay a challenge to Office Order No. 41 of 2020 dated 17.04.2020 and Circular dated 07.09.2020 as well as notices of recovery. Petitioners are retired employees of NHPCL and as per the details furnished in the writ petition, retired on different dates between 2008 and early 2019. Recoveries pertain to 1997 and 2007 pay structures and were sought to be made from the arrears paid to the Petitioners post their retirement, on fixation of revised pay.
16. Genesis of this writ petition lies in DPE O.M. dated 25.06.1999 revising the pay scales of Board level and below Board level posts including non-unionised Supervisors in Public Enterprises w.e.f. 01.01.1997, pursuant to recommendations of a High-Level Committee set up by the Government under Chairmanship of Justice S. Mohan. The revised pay scales were indicated in Annexure-I to the said O.M. It was provided that there will be a provision for grant of upto a maximum of three stagnation increments for those who reached the maximum of their pay scales. NHPCL issued Office Order No.3/2000 on 19/21.01.2000 implementing revised pay scales, fitment formula and DA guidelines in terms of DPE O.M. dated 25.06.1999. Under the Table providing the revised pay scales, a ‘Note’ was inserted indicating that revised pay scales in E-1 and E-7 grades were provisional and subject to approval from Government of India and the incumbents of these posts were required to give an undertaking in the enclosed format that in the event of any alteration/modification in the proposed revised pay scales or otherwise, as decided by the Government, the same will be implemented and necessary adjustments will be made from arrears/future salary. For stagnation increments, there was no periodicity. Relevant part of Office Order No.3/2000 is as follows:-

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17. On 04.04.2006, Ministry of Power wrote to NHPCL that it had no objection to removal of anomalies in the proposed pay scales and adoption of the revised pay scales being considered by the Board of NHPCL insofar as the range was in line with the pay scales prescribed by DPE based on recommendations of Justice S. Mohan Committee. It is explained by NHPCL that the anomaly referred to in the said letter arose in 1997 owing to faulty implementation due to difference in increment rates amongst the CPSEs in general and NHPCL, because of which NHPCL’s increment was less than 4%. To rectify this, NHPCL made a proposal to bring the increment at par with other CPSEs, i.e. at 4%.
18. In supersession of order dated 19/21.01.2000, NHPCL issued Office Order No.22/2006 dated 09.05.2006, by which modified scales of pay were prescribed and E-1 and E-7 pay scales were shown as provisional. Significantly, in para 9 with respect to stagnation increments, it was provided that if Basic Pay and Special Pay of an employee reaches maximum of the pay scale at any time during the period from 01.01.1997 to 31.12.2006, he will be allowed stagnation increments subject to the due dates falling within this period and a maximum of three increments. It was also provided that stagnation increments would be released on the anniversary date of the increment and will be paid as Stagnation Pay. Para 9 of Office Order dated 09.05.2006 is as follows:-
“9. Stagnation Increment
If Basic Pay and Special Pay of an employee reaches the maximum of the Pay Scale at any time during the period from 1.1.1997 to 31.12.2006, he will be allowed stagnation increments, at the rate of increment last drawn, on the due date of increment subject to following condition:
i. The due date of increments should fall within the Pay revision period 1.1.1997 to 31.12.2006.
ii. Grant of such increments shall be limited to maximum on three occasions only, during the said pay revision period.
iii. Stagnation increment(s) is to be released on the anniversary date of increment and will be paid as ‘Stagnation Pay’ to be treated as Basic Pay for all purposes except for promotion benefit.”

19. On 26.11.2008, DPE issued an O.M. for revision of pay scales w.e.f. 01.01.2007 and the revised pay scales were indicated in Annexure-I appended to the O.M. This was followed by a letter dated 30.04.2009 issued by the Ministry of Power stating that the pay revision should be in consonance with DPE guidelines and for any deviation, a proposal with justification must be referred to the Ministry of Power to take up the matter with DPE. It was also stated that for the purpose of fitment benefit, if any extraordinary increment and/or increase in pay had been granted retrospectively, which effects the revision of pay as on 01.01.2007 and does not have approval of DPE, such increment or increase will be ignored for fitment/pay revision.
20. On 02.11.2010, an Office Order No.46/2010 was issued by NHPCL to revise the pay scales w.e.f. 01.01.2007 pursuant to DPE guidelines and Presidential Directive issued by Ministry of Power vide letter dated 30.04.2009. Relevant part of the order is as follows:
“Sub: Revision of Pay Scales and Allowances provisionally in respect of Executives
In pursuance to DPE guidelines issued vide OMs dated 26.11. 2008, 09.02.2009, 02.04.2009, 22.06.2010 and Presidential Directives issued by Ministry of Power vide their tetter dated 30.04.2009, it has been decided to revise the pay scales w.e.f. 01.01.2007 & allowances w.e.f 26.11.2008, provisionally, in respect of Executives and Teaching Staff in these pay scales as given at Annexure-l.
1.0 Revised scales of Pay
1.1 Existing Pay scales, the pay scales in which pay is to be reworked notionally w.e.f 01.01.1997 and the revised pay scales w.e.f. 01.01.2007 shall be as per Annexure-I
1.2 The existing structure of grades and entitlements in case of Executives shall remain the same wherever there is sharing of pay scales.
1.3 The pay of Executives on the rolls of NHPC on 31.12.2006 shall be re-worked notionally in the pay scales as at column 3 of table in Annexure-I w.e.f. 01.01.1997 to 31.12.2006 and based thereon pay shall be fixed on 01.01.2007 in the revised pay scales as at column 4 of table in Annexure-I. Other conditions regulating the pay w.e.f. 01.01.1997 to 31.12.2006 shall remain unchanged.
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3.0 Annual Increment
3.1 The rate of annual increment in the revised scales of pay shall be 3% of revised Basic Pay. The amount of each increment shall be rounded off to the next Rs.10/- (Rs. Ten). The increment due on 01.01.2007 shall be drawn in revised pay scale.
4.0 Stagnation Increment
4.1 The rate of stagnation increment will be 3% of the revised basic pay and Executives will be allowed to draw maximum three stagnation increments, one after every two year, upon reaching the maximum of the pay scale provided the Executive gets a performance rating of “Good” or above.
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21.0 As regards payments already made to employees on account of salary following modified pay scales from 01.01.1997 to 31.12.2006, there will be no payment/recovery on account of reworking of pay notionally in the pay scales with DPE increments w.e.f. 01.01.97, till further orders.
22.0. The aforesaid implementation of pay scales w.e.f. 01.01.2007 is provisional subject to approval of the Govt. On receipt of necessary approval/directives from Ministry of Power in respect of revision of pay scales and rate of increments, the same shall be dealt with accordingly. In case of recovery, if any, as per actual, after regularization, the same shall be effected. The payment shall be released after obtaining undertaking from the executives in the prescribed form attached as per Format – B by HR Department. The HR Department shall retain the undertaking in personal file of the executive and inform the Finance for release of arrear.”

21. Undertakings as required at the time of pay revisions were given by the employees including the Petitioners. On 14.12.2012, DPE issued an O.M. for finalization of terms and conditions including pay fixation in respect of Board level Executives of CPSEs and relevant paragraphs are as follows:-
“5. While fixing the pay of Board level executives of CPSEs, the following points will be taken into consideration:-
i) The last pay drawn by the incumbent should have been drawn as per DPE guidelines. If any stagnation increments were given to the executive, either in 1997 or in 2007 pay revision, the same should have been granted only after reaching the maximum of the prescribed pay scale and once in two years, with a maximum of three such stagnation increments only. It may be clarified that there was no such concept of stagnation increment in 1987 and 1992 pay revisions.
ii) …………..
iii) Increment, if any, due on 01.01.2007 should be panted first in the pre-revised scale (1997 pay revision) and only thereafter should fitment be granted, and pay fixed in the revised scale as on 01.01.2007 (Appendix, example 10).
iv) Stagnation increment will be permissible only after reaching the maximum of the scale. As there are no fixed stages of increment in 2007 pay scales, the last increment due in a scale before reaching the maximum of the scale, may be less than 3%. Stagnation increment will be provided once after every two years, and there can be a maximum of three stagnation increments in a grade (Appendix, example 11).”

22. On 24.12.2012, DPE issued another O.M. in reference to its earlier O.M. dated 26.11.2008 which inter alia provided different Grades and corresponding pay scales in 2007 pay revision, noting that some CPSEs had adopted higher or different pay scales than those prescribed under 2007 pay revision for their Executives and below Board level and clarified that below Board level Executives have necessarily to be in specified Grades of E-0 to E-9 depending upon the schedule of the CPSE and while CPSE was free to recruit Executives for each Grade as per functional requirement and Rules, however, the same must be in consonance with DPE guidelines and the corresponding pay scales prescribed. On 27.12.2013, Ministry of Power informed the CPSEs that deviant pay scales fixed from 01.01.1997 shall not be regularized, however, no recovery shall be made for the excess pay drawn from 01.01.1997 onwards considering the difficulties in effecting recoveries and also considering that such recoveries may de-motivate the staff. It was stated that pay scales shall be fitted w.e.f. 01.01.2007 after correcting the aberrations in pay scales fixed from 01.01.1997.
23. On 29.01.2019, the Ministry of Power approved the proposal to regularize the adopted pay scales of below Board level Executives in four PSUs including NHPCL w.e.f. 01.01.1997 adopted pursuant to Ministry of Power’s orders dated 04.04.2006 and 01.09.2006. In pursuance of this letter, pay scales were regularized by NHPCL w.e.f. 01.01.1997 vide Office Order No.16/2019 dated 19.03.2019 as follows:-
“Sub: Regularization of pay scales of below Board level executives w.e.f 01.01.1997.
In pursuance of Ministry of Power letter F No. 2/1/2014-H.I (Pt) dated 29.01.2019, the pay scales of below Board level executives w.e.f 01.01.1997 are regularized as under:
1. The scales of pay w.e.f 01.01.1997 adopted in pursuance of the order of MOP, No.11/6/2006-DO (NHPC) dated: 04.04.2006, which was implemented, vide Part-I Office Order no. 22/2006 dated 09.05.2006 stands regularized.
2. Consequently, the provisional revised pay scales w.e.f 01.01.2007 as implemented vide O/O No. 46/2010 dated: 02.11.2010 are also hereby regularized as under:
2.1 On such regularization of pay scales, the revised pay w.e.f 01.01.2007 shall be re-fixed based on actual pay drawn in the pay scales w.e.f 01.01.1997 to 31.12.2006. Therefore, clause 1.3 of the O/O no. 46/2010 dated 02.11.2010 stands amended to the extent that the basic pay of below Board level executives on the rolls of the Corporation as on 31.12.2006 shall be fitted in the corresponding revised scales of pay as indicated in Annexure-I.
2.2 Accordingly on such regularization the “Personal Adjustment” extended w.e.f 01.01.2007 is hereby withdrawn. The other conditions regulating the pay like the fitment methodology, rate of annual increment etc. w.e.f 01.01.2007 to 31.12.2016 shall remain unchanged.
3. The revised scales of pay w.e.f 01.01.2017 which was implemented vide Part-I Office Order No. 30/2018 dated 30.05.2018 shall remain unchanged. The other conditions regulating the pay like fitment methodology, rate of annual increment etc., shall also remain unchanged. Accordingly, the aforesaid executives who were on the rolls of the Corporation as on 31.12.2016 and continued in service thereafter shall be fitted in the corresponding revised scale of pay w.e.f 01.01.2017.
This issues with the approval of the Competent Authority.”

24. Therefore, it is evident that pursuant to the directive of the Ministry of Power issued vide letter dated 29.01.2019, NHPCL regularized the pay scales w.e.f. 01.01.1997 implemented vide Office Order dated 09.05.2006, which included stagnation increments up to a maximum of three to be released on the date of the anniversary of the increments with no mention of periodicity. Upto this stage there was no issue, but the dissonance, if I may so state, occurred when the internal Committee constituted by NHPCL vide order dated 28.06.2019, gave its report on 21.08.2019. A reading of the report shows that some representations were received from senior Executives pointing out anomalies, due to which their juniors were drawing higher pay. On the anomalies presented before it, the Committee gave its recommendations, three of which are relevant for the present case and based on the report, NHPCL issued the impugned Office Order dated 17.04.2020, relevant part of which is as follows:-
“Subject: Pay Fixation Related Issues.
On representations of executives for anomalies in Pay/Pay fixation on promotion, a committee comprising of senior officers was constituted for examining the various pay anomalies/pay fixation related issues. Based on the recommendations of the committee and approval of the CMD in this regard, it has been decided to implement the following as given under:
1. Promotion of Executives from Chief/Chief Engineer (E-7 grade) to the post of General Manager (E-8 grade) in the same pay scale of 51300-3%-73000 shall be treated as redesignation, thus the promotional benefit of notional increment granted if any on such re-designation from Chief (E-7) to General Manager (E-8) in the same pay scale of 51300-3%-73000 in the 2007 pay structure shall be withdrawn w.e.f 01.01.2007. Accordingly the Stagnation Increments which was withdrawn in the 2007 pay structure on such promotion shall be restored.
2. Increment, if any, falling due on 01.01.2007 shall be granted first in the pre-revised pay scale (1997 pay revision) and only thereafter fitment benefit shall be granted, and pay fixed in the revised pay scales as on 01.01.2007. Accordingly clause 3.1 of Part-I Office Order No: 46/2010 dt: 02.11.2010 stands amended to above extent.
3. Stagnation increment shall be granted once in two years on reaching the maximum of the pay scale in the 1997 pay structure i.e. during the period from 01.01.1997 to 31.12.2006, thus clause 9 of the of Part-I Office Order No: 22/2006 dt: 09.05.2006 shall stand amended to above extent.
4. Employees who have been appointed on or after 01.01.1989 and continued in CDA pay scales, shall be placed in IDA Pay Scales retrospectively from the date of their initial appointment in pursuance to Part-I Office Order No: 23/90 dt:10.07.1990 & Office Order No: 12/93 dt: 19.05.1993.
Other terms and conditions of above mentioned office orders shall remain unchanged. Pay fixation of employees shall be reviewed in the light of aforesaid decisions and regulated accordingly.
This issues with the approval of the Competent Authority.”

25. This Office Order triggered recoveries vide Circular No.492 dated 07.09.2020, relevant part of which is as under:-
“Subject: Pay Anomaly Recoveries in compliance to HR Part-I O/o No. 41/2020 dated 17/04/2020
In compliance to HR office order no. 41/2020 dated 17/04/2020, pay fixation of executives has been revised and implemented from the month of April’2020 with the approval of the competent authority. Pay fixation chart of executives has been displayed on Intranet vide Finance Circular no. 489 dated 26/05/2020. On re-fixation of basic pay, the tentative arrear amount recoverable has been calculated and shown in Employee Sahaj Sewa Portal vide Finance Circular no. 491 dated 17/08/2020.
The competent authority has accorded approval for recovery of excess amount paid to executives in the following manner from active and Non-active executives:
1. Recovery from Active (On roll) Executives:
a) Amount to be recovered first from amount payable to executives on account of PRP for F.Y. 2018-19.
b) Balance recoverable amount, if any, after recovery from PRP for F.Y.2018-19 will be recovered w.e.f September 2020 in 24 equal instalments or number of instalments up to retirement of employee whichever is less.
c) Amount of instalment will not be more than 50% of take home salary after statutory deductions.
d) If employee retires before completion of full recovery, the balance amount will be recovered from amount payable to employee on account of full and final settlement other than payment of Gratuity and PF.
2. Recovery from Non-Active (Retired) Employees:
a) Amount to be recovered first from amount payable to executives on account of PRP for F.Y. 2018-19.
b) Balance recoverable amount, if any, after recovery from PRP for F.Y. 2018-19 will be recovered from pending dues to them, other than the payment of Gratuity and PF.
c) In case where recovery is pending and no dues are payable to Non-active employees, HR Division will issue notice to all ex-employees for depositing the amount of recovery. Where the ex-employee fails to deposit the amount, HR will initiate the legal action to make recovery from ex-employees.”

26. Broadly understood, recoveries are on account of: (a) alteration in periodicity of stagnation increments from once every year to once in two years; (b) treating promotions of Executives from Chief/Chief Engineer to post of GM, both placed in the pay scale of Rs.51300-73000, as re-designation and consequently withdrawing promotional benefit of notional increment granted, if any, on such re-designation in the same pay scale and restoring the stagnation increments withdrawn w.e.f. 01.01.2007; and (c) increment, if any, falling due on 01.01.2007 to be granted first in the pre-revised scale in 1997 pay revision and thereafter, granting fitment benefit in the revised pay scale.
27. While contesting the impugned order dated 17.04.2020, Petitioners contended that assuming there was an anomaly or error in grant/fixation of increments, no recoveries can be made from the Petitioners being retired employees, in light of paragraph 18 of the judgment of the Supreme Court in Rafiq Masih (supra). Without prejudice, arguments were canvassed on the legal validity of the impugned order urging that the same was without jurisdiction and against the Presidential Directive and that the increment fixation could not be altered and at the highest the order would have a prospective effect. In rebuttal, NHPCL justified the re-fixation based on anomalies pointed out by the Internal Committee as also consequential recoveries. As for recoveries, NHPCL also placed emphasis on the undertakings given by the Petitioners at the time of pay revisions for refunding the excess payments and underscored that both pay revisions were provisional and subject to Government approval, a fact well known to the Petitioners and reliance was placed on judgment of the Supreme Court in Jagdev Singh (supra) to urge that given the undertakings by the Petitioners, judgment in Rafiq Masih (supra), will not aid the Petitioners.
28. The first and foremost question that needs consideration is whether Petitioners can be subjected to recoveries from the arrears disbursed to them as a result of pay revisions, in light of the judgment of the Supreme Court in Rafiq Masih (supra), as admittedly, Petitioners had retired when recoveries were sought from the arrears disbursed, post retirement. Before proceeding forward, I may refer to the judgment in Rafiq Masih (supra) as also subsequent judgments following the principles elucidated in Rafiq Masih (supra). Relevant passages from Rafiq Masih (supra) are as follows:
“13.  First and foremost, it is pertinent to note, that this Court in its judgment in Syed Abdul Qadir case [Syed Abdul Qadir v. State of Bihar, (2009) 3 SCC 475 : (2009) 1 SCC (L&S) 744] recognised, that the issue of recovery revolved on the action being iniquitous. Dealing with the subject of the action being iniquitous, it was sought to be concluded, that when the excess unauthorised payment is detected within a short period of time, it would be open for the employer to recover the same. Conversely, if the payment had been made for a long duration of time, it would be iniquitous to make any recovery. Interference because an action is iniquitous, must really be perceived as, interference because the action is arbitrary. All arbitrary actions are truly, actions in violation of Article 14 of the Constitution of India. The logic of the action in the instant situation, is iniquitous, or arbitrary, or violative of Article 14 of the Constitution of India, because it would be almost impossible for an employee to bear the financial burden, of a refund of payment received wrongfully for a long span of time. It is apparent, that a government employee is primarily dependent on his wages, and if a deduction is to be made from his/her wages, it should not be a deduction which would make it difficult for the employee to provide for the needs of his family. Besides food, clothing and shelter, an employee has to cater, not only to the education needs of those dependent upon him, but also their medical requirements, and a variety of sundry expenses. Based on the above consideration, we are of the view, that if the mistake of making a wrongful payment is detected within five years, it would be open to the employer to recover the same. However, if the payment is made for a period in excess of five years, even though it would be open to the employer to correct the mistake, it would be extremely iniquitous and arbitrary to seek a refund of the payments mistakenly made to the employee.
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16.  This Court in Syed Abdul Qadir v. State of Bihar [Syed Abdul Qadir v. State of Bihar, (2009) 3 SCC 475 : (2009) 1 SCC (L&S) 744] held as follows : (SCC pp. 491-92, para 59)
“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 a 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. The 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)
Premised on the legal proposition considered above, namely, whether on the touchstone of equity and arbitrariness, the extract of the judgment reproduced above, culls out yet another consideration, which would make the process of recovery iniquitous and arbitrary. It is apparent from the conclusions drawn in Syed Abdul Qadir case [Syed Abdul Qadir v. State of Bihar, (2009) 3 SCC 475 : (2009) 1 SCC (L&S) 744] , that recovery of excess payments, made from the employees who have retired from service, or are close to their retirement, would entail extremely harsh consequences outweighing the monetary gains by the employer. It cannot be forgotten, that a retired employee or an employee about to retire, is a class apart from those who have sufficient service to their credit, before their retirement. Needless to mention, that at retirement, an employee is past his youth, his needs are far in excess of what they were when he was younger. Despite that, his earnings have substantially dwindled (or would substantially be reduced on his retirement). Keeping the aforesaid circumstances in mind, we are satisfied that recovery would be iniquitous and arbitrary, if it is sought to be made after the date of retirement, or soon before retirement. A period within one year from the date of superannuation, in our considered view, should be accepted as the period during which the recovery should be treated as iniquitous. Therefore, it would be justified to treat an order of recovery, on account of wrongful payment made to an employee, as arbitrary, if the recovery is sought to be made after the employee’s retirement, or within one year from the date of his retirement on superannuation.
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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 a 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 C and Group D service).
(ii) Recovery from the retired employees, or the 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 a 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 a 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.”
(Emphasis supplied)

29. Following the judgment in Rafiq Masih (supra), Division Bench of this Court in Dilbagh Singh Bains (supra) held as follows:
“12. The judgment of the Supreme Court in the case of Rafiq Masih (supra) is very clear wherein the Supreme Court has culled out situations where the benefits cannot be recovered, the same are, as under:
“(i) Recovery from employees belonging to Class-III and Class-IV service (or Group ‘C and Group ‘D