Bombay High Court Bars ₹39.94-Lakh Post-Retirement Recovery From Class-III University Employee; Quashes Notice and Orders Full Retiral Benefits, ACPS, Seventh Pay Commission Arrears Within Three Months
Bombay High Court Quashes Pune University’s ₹39.94-Lakh Recovery Against Retired Data Entry Operator; Orders Release of Retiral Benefits Within Three Months
Facts
The petitioner, Shrinivas Ganesh Kulkarni, was a retired Class-III employee of Savitribai Phule Pune University who challenged a letter dated 17 April 2023 seeking recovery of ₹39,94,343 on the ground that excess salary had allegedly been paid to him because of erroneous pay fixation. He also sought release of gratuity, leave encashment, benefits under the Assured Career Progression Scheme (ACPS), Seventh Pay Commission benefits and interest on his Provident Fund.
Kulkarni initially joined the University as a Data Entry Operator on job-work basis on 7 June 1993 and received an official temporary appointment on 22 July 1993. He was appointed permanently on 26 September 1994, and his pay was subsequently protected.
He was confirmed on the post with effect from 7 June 1995. The University later extended to him the benefit of the Time Bound Promotion Scheme from 7 June 2005, after completion of 12 years of service. He claimed that the second ACPS benefit due after 24 years of service had not been granted.
The petitioner retired on 31 December 2022. His gratuity, earned leave encashment and other post-retiral benefits were thereafter withheld.
On 17 April 2023, after his retirement, the University informed him that his salary under the Sixth Pay Commission had been wrongly fixed and that ₹39,94,343 was recoverable from him. According to the University, he should have been placed in a lower pay band of ₹5,200–20,200 with Grade Pay ₹2,400 instead of ₹9,300–34,800 with Grade Pay ₹4,300.
Kulkarni repeatedly represented that he had never demanded the higher pay scale and that the salary had been fixed entirely by the University. His letters seeking release of his post-retiral dues remained unanswered.
Issues
The principal issue was whether an employer could recover allegedly excess salary from a retired Class-III employee, particularly where the overpayment resulted from the employer’s own pay-fixation error.
The Court also considered whether an undertaking given by the employee at the time of implementation of the Sixth Pay Commission—agreeing to refund amounts found subsequently to have been overpaid—could permit such recovery.
A further issue was whether the petitioner was entitled to the withheld retiral benefits, ACPS benefits, Seventh Pay Commission revision, leave encashment and Provident Fund interest.
Petitioner’s Arguments
The petitioner primarily relied upon the Supreme Court’s decision in State of Punjab v. Rafiq Masih (White Washer), (2015) 4 SCC 334, arguing that recovery of excess payment from Class-III and Class-IV employees is impermissible where such payments were made by mistake of the employer.
He also relied upon the Bombay High Court’s decision in Anil Pralhad Dhande v. State of Maharashtra, where the principles laid down in Rafiq Masih had been applied to protect a retired Class-III employee from recovery.
Kulkarni stressed that he had already retired on 31 December 2022 and that, apart from his Provident Fund, the University had withheld virtually all post-retiral benefits. Since his service was non-pensionable, these benefits constituted his principal financial support after retirement.
He further argued that he had never sought or manipulated the higher pay scale. The fixation had been carried out by the University itself.
Respondents’ Arguments
The University contended that the petitioner had been appointed as a Data Entry Operator under University funds and that, under the applicable Government Resolution, his correct Sixth Pay Commission pay scale was PB-1 ₹5,200–20,200 with Grade Pay ₹2,400.
According to the University, he had been mistakenly placed in PB-2 ₹9,300–34,800 with Grade Pay ₹4,300, resulting in excess salary payment.
The University also relied upon an undertaking allegedly furnished by the petitioner when the Sixth Pay Commission was implemented, under which he had agreed to refund excess amounts arising from incorrect pay fixation or subsequent discrepancies.
It further alleged that the petitioner had relied upon the pay scale applicable to a different category—Data Entry Operator Grade-I (Bioinformatics)—whereas his actual designation was Data Entry Operator Grade-III, carrying a lower scale. The University therefore accused him of suppression and misleading the Court.
Analysis of the Law
Recovery From Class-III Employees Is Impermissible
The High Court found the case to be squarely covered by Rafiq Masih.
The petitioner was admittedly a Class-III employee, and the recovery notice was issued only after his retirement. The Supreme Court had specifically identified recovery from Class-III/Class-IV employees and retired employees as situations where recovery of excess payment would ordinarily be impermissible.
The Court relied upon the five categories set out in Rafiq Masih, including recovery from:
- Class-III and Class-IV employees;
- retired employees or those due to retire within one year;
- employees where excess payments continued for more than five years; and
- situations where recovery would be iniquitous, harsh or arbitrary.
Kulkarni fell squarely within at least the first two categories.
Undertaking Did Not Alter the Result
The University sought to rely on Kulkarni’s undertaking to refund excess payment arising out of erroneous pay fixation.
The High Court rejected this defence in the circumstances of the case. It held that the existence of such an undertaking did not take the petitioner outside the protection available to him as a retired Class-III employee under Rafiq Masih.
Post-Retirement Recovery Strengthened Employee’s Case
The Court considered it important that the petitioner retired on 31 December 2022, whereas the recovery notice was issued only on 17 April 2023.
The recovery was thus sought after retirement for payments which the employer itself claimed had been erroneously made over a long period.
The Bench held that this circumstance further strengthened the petitioner’s case and observed that money already paid could not, in these circumstances, be recovered merely because the employer subsequently discovered its own mistake.
The Court additionally observed that even a civil suit for recovering such old amounts would have been hopelessly time-barred.
Precedent Analysis
State of Punjab v. Rafiq Masih
The principal authority was State of Punjab & Ors. v. Rafiq Masih (White Washer), (2015) 4 SCC 334.
The Supreme Court had recognised that even where an employer has mistakenly overpaid an employee, recovery may be legally impermissible where its harshness and inequity outweigh the employer’s claim.
Of particular importance were the categories expressly protecting Class-III/Class-IV employees and retired employees.
Syed Abdul Qadir v. State of Bihar
A Co-ordinate Bench had earlier recorded a prima facie view that the controversy was covered by Syed Abdul Qadir v. State of Bihar, (2009) 3 SCC 475, as well as Rafiq Masih, and had directed the University to deposit the petitioner’s retiral dues with the Court pending final disposal.
Anil Pralhad Dhande v. State of Maharashtra
The High Court also relied upon Anil Pralhad Dhande v. State of Maharashtra, in which a Co-ordinate Bench had applied Rafiq Masih to hold that recovery from a retired Class-III employee could not be sustained despite an undertaking permitting recovery of excess payment.
High Court of Punjab and Haryana v. Jagdev Singh
The University relied on High Court of Punjab and Haryana v. Jagdev Singh, (2016) 14 SCC 267, where recovery pursuant to an undertaking had been permitted.
The Bombay High Court distinguished Jagdev Singh because that case concerned a Class-I Judicial Officer, whereas Kulkarni was admittedly a Class-III employee, specifically falling within the protective categories in Rafiq Masih.
Mandeep Singh Kohli v. Union of India
The Court also distinguished Mandeep Singh Kohli & Ors. v. Union of India, 2021 (1) Mh.L.J. 370.
There, the employees themselves had litigated for a higher pay scale and furnished undertakings while entitlement remained sub judice. They were found disentitled within approximately 20 months.
Kulkarni, by contrast, had not sought the higher scale; the University claimed that it had been granted purely due to its own mistake and attempted recovery only after his retirement and after a considerably longer period.
Court’s Reasoning
The decisive circumstances were that Kulkarni was a Class-III employee, the alleged excess payment resulted from the University’s own pay-fixation error, the higher salary had continued for a substantial period, and recovery was attempted only after retirement.
The Court found that permitting recovery of almost ₹40 lakh from a retired Class-III employee’s retiral benefits would be contrary to the equitable principles in Rafiq Masih.
It therefore held that such recovery would be “illegal and arbitrary” and that the University’s notice could not be sustained.
The Court went further than merely cancelling the recovery. It granted consequential service and retirement benefits which had been withheld because of the disputed demand.
Conclusion
The Bombay High Court allowed the writ petition and quashed the University’s letter dated 17 April 2023 to the extent that it directed recovery of ₹39,94,343 from the petitioner.
If any amount had already been recovered under that notice, the University was directed to refund it within three months.
The University was further directed to pay:
all post-retiral benefits, including the benefit of the Assured Career Progression Scheme from June 2017 with arrears and appropriate interest; accumulated earned leave encashment; and interest accrued on the Provident Fund.
The University was also directed to implement the Seventh Pay Commission with effect from 1 June 2016, based on the existing scale of ₹9,300–34,800 with Grade Pay ₹4,300, after granting ACPS benefit for 24 years of continuous service.
All directions were ordered to be complied with within three months. The petition was disposed of with no order as to costs.
Case Details
Case: Shrinivas Ganesh Kulkarni v. Savitribai Phule Pune University & Ors.
Court: Bombay High Court, Civil Appellate Jurisdiction
Case Number: Writ Petition No. 14168 of 2024
Citation: 2026:BHC-AS:37589-DB
Bench: Justice G. S. Kulkarni and Justice Aarti Sathe
Reserved: 28 July 2026
Pronounced: 11 September 2026
Result: ₹39.94-lakh recovery quashed; University directed to refund any recovered amount, release all post-retiral dues, grant ACPS and Seventh Pay Commission benefits, and comply within three months.
