Excess Pay Released by Mistake Can Be Recovered Where Teachers Undertook to Refund: Supreme Court

The appellants, lecturers and assistant professors of the National Institute of Technology, received the financial benefits of Academic Grade Pay around October 2009; in January 2010 the benefits were withdrawn and recovered on the ground that they lacked the required years of service (para 4). They had signed undertakings (Exhibit R2(c)) agreeing to refund any excess if the pay fixation proved wrong (para 18). On 26.11.2014 a Single Judge of the Kerala High Court allowed their writ petition, but on 13.11.2015 a Division Bench reversed it, relying on Chandi Prasad Uniyal (paras 1, 19). The appellants invoked Rafiq Masih (White Washer) and Thomas Daniel (para 5).

Chandi Prasad Uniyal held that money paid without authority of law can be recovered, save in cases of extreme hardship, since keeping it would be unjust enrichment (para 9). A three-Judge Bench in State of Punjab v. Rafiq Masih (2014) treated Sahib Ram and Shyam Babu Verma as directions under Article 142, and Chandi Prasad Uniyal as declaring the law under Article 136 (paras 10-12). Yet Rafiq Masih (White Washer) followed the Article 142 line, and Thomas Daniel considered neither decision; the law has perhaps not developed on correct lines, and Section 72 of the Contract Act underlies Chandi Prasad Uniyal (paras 13-16). This case was governed by Jagdev Singh: an employee who undertook to refund any excess is bound by it (paras 16-17). The mistake was corrected on detection, a later ministry letter came after the recovery, and hardship was neither pleaded nor proved; it would justify relief only on proof, such as money spent on medical treatment, and absent misrepresentation or fraud (paras 20-24).