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Smt. Sasikala Devi P. vs. The State of Kerala

Civil Appeal · 2023 INSC 447Decided 28 Apr 2023
Civil Appeal No. 8716 of 2012
Abhay S. Oka · Rajesh Bindal

Background

The appellant, an Assistant Grade-II employee who rose through promotions at the University of Calicut, transferred to Kerala University under an inter-university transfer policy that placed her at the bottom of the seniority list in the entry grade, though her existing (higher) pay was protected. When she was later promoted again at Kerala University, her pay was refixed upward, but an audit objection challenged this refixation as erroneous, and the State ultimately sought recovery after the High Court's Division Bench ruled against the employees (reversing a Single Judge who had ruled in their favour).

Decision Breakdown

The Supreme Court held that the transfer policy's own rule meant a transferred employee could not get a second round of promotional pay benefits on top of the personal pay protection already given for the higher salary carried over from the parent university, allowing it would amount to a double benefit. The Court therefore upheld the Division Bench's finding that the pay refixation was erroneous. However, applying its precedent in State of Punjab v. Rafiq Masih, it directed that no recovery be made from the retired employees for amounts already paid to them in good faith, while permitting their pension to be refixed based on what they were actually entitled to at retirement.

Lesson Learnt

Even where a pay benefit is found to have been wrongly granted, courts will generally protect employees (especially after retirement) from having to repay money received in good faith through no fault of their own, even while correcting the underlying error going forward.

Official source (sci.gov.in)View Judgment (PDF)

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