Holding

Pay fixation on promotion of assistant teachers is governed by FR.22(1)(a)(1) and FR.22(1)(a)(2), not FR.22‑C, and since the promotion did not entail greater responsibilities FR.22(1)(a)(2) applies; consequently, the order for recovery of excess pay is set aside and no recovery shall be made.

Summary

The case concerned assistant teachers of Bihar's Nationalised Schools whose pay on promotion had been fixed under the now‑defunct Fundamental Rule 22‑C (FR.22‑C). The State of Bihar issued an office order in 2000 directing re‑fixation of pay under the amended provisions FR.22(1)(a)(1) and FR.22(1)(a)(2) and recovery of excess amounts. The Supreme Court held that FR.22‑C was not in force on the date of the 1989 resolution and that the applicable rules were FR.22(1)(a)(1) and FR.22(1)(a)(2); because promotion to the higher grade did not involve duties of greater importance, FR.22(1)(a)(2) applied. The Court further held that the excess payments were a bona‑fide mistake, not due to any fraud by the teachers, and in equity ordered that no recovery be made and any amounts already recovered be refunded. The appeals were partly allowed, setting aside the recovery direction.

Issues considered

The applicability of FR.22‑C versus the amended provisions FR.22(1)(a)(1) and FR.22(1)(a)(2) to pay fixation on promotion of assistant teachers.
Whether the amended provisions apply prospectively or retrospectively.
Whether the excess amounts paid under the erroneous rule can be recovered from the teachers.

Legislation cited

Bihar Service Codes. Rule 78(ii)
Fundamental Ruless. FR.22(1)(a)(1), s. FR.22(1)(a)(2), s. FR.22-C

Subjects

service lawpay fixationpromotionFundamental Rulesexcess payment recoveryequityretrospective applicationBihar Service Codeteachers' pay

Judgment

[2008] 17 S.C.R. 917

SYED ABDUL QADIR & ORS. A
v.
STATE OF BIHAR & ORS.
(Civil Appeal Nos. 3351-3354 of 2003)
DECEMBER 16, 2008
B
[B.N. AGGARWAL, HARJIT SINGH BEDI AND G.S.
SINGHVI, JJ.]

Service law - Pay fixation of, on promotion to higher!
selection grade - Assistant teachers of Nationalised Schools c
in Bihar - Anomaly in pay fixation - Resolution of 18. 12.1989
by State laying down criteria for pay revision of teachers on
basis of FR.22-C - Said rule providing for grant of additional
increment on promotion to higher post carrying duties and
responsibilities of greater importance - However, before the . D
said Resolution came into force, FR 22-C was deleted and
FR.22(/)(a)(1), FR.22(/)(a)(2) inserted - Subsequently,
Resolution of 20.2.1993 that pay to be fixed as per r. 78(ii) -
High Court holding that said Resolution applicable
prospectively - Despite amendment, Government of Bihar
reiterating that pay to be fixed as per FR. 22-C and instances E
of pay fixation thereunder - Office Order to re-fix pay under
FR.22(/)(a)(2) and recover excess payment made from the
date of initial fixation of pay under FR.22-C - Challenge to -
Held: FR.22(/)(a)(1) and FR.22(1)(a)(2) would apply to teachers
and not FR.22-C which was not in existence on the date of F
Resolution - Teachers were not discharging any duties and
~ i responsibilities of greater importance on their promotion to
higher post/grade - Amended provisions would apply
prospectively and not retrospectively - Excess amount paid
due to wrong interpretation of the Rule - Inaction, negligence G
and carelessness of officials of Government of Bihar created
all chaos - Thus, direction for recovery of amount paid in
· excess to teachers s$t aside - Bihar Service Code - r. 78(ii).
Appellants are Assistant Teachers of Nationalised
917 H
918 SUPREME GOURT REPORTS .[2008] 17 S.C.R.

,· A Schools in Bihar. They are controlled by Government of
Bihar. The secondary school teachers of the Nationalised
Schools were categorised. The hierarchy of promotion of
these teachers was from the post of Assistant Teacher
Junior Gr.ade to Subordinate Grade, then to the Selection
B Grade and finally to Head Master. There was anomaly in
the pay scales of teachers. The Government of Bihar
passed a Resolution dated 18.12.1989 with regard to
revision of pay scales of teachers of Nationalised
Schools based on the recommendations of the 4th Pay
C Revision Committee. The said recommendations were
made applicable to all the teachers who were in service
on 01.01.1986 and those who joined or were promoted
thereafter. Clause 13 of the Resolution laid down the
principles of fixation of pay in the revised pay scales in
case of promotion. Clause 13(vii) provided that the
D existing procedure of fixation of pay on promotion would
cease to be· applicable to teachers in the revised pay-
scales w.e.f. 1.1.1986 and pay fixation on promotion
would be governed by FR.22-C. However, before
Resolution dated 18.12.1989 came into force, by gazette
I
E notification of Government of India dated 30.08.1989, FR
22-C was deleted and FR.22(1)(a)(1) and FR.22(1)(a)(2) was
inserted in its place. On 20.2.1993, Government of Bihar,
issued another Resolution that pay of the teachers, on
completion of 12 years of service in the basic grade was
F to be fixed as per Rule 78(ii) of the Bihar Service Code
even tho.ugh under Rule 78(ii) there was no provision for
grant of an additional increment on promotio~ to the
higher post carrying duties and responsibilities of greater
importance as in FR.22-C.
Some of the elementary school teachers challenged
G the Resolution dated 20.2.1993. Single Judge of High
( Court held that the Resolution . dated 20.2.1-993 would
come into effect only prospectively and was not
applicable in the matter of fixation of pay on promotion/
conversion granted prior to 20.2.1993. Aggrieved, State
H of Bihar filed letters patent appeal which was dismissed
SYED ABDUL QADIR & ORS. v. STATE OF BIHAR & 919
ORS.

on merits. State of Bihar did not challenge the same A
before this Court. Meanwhile, as pay on promotion was
-"· ~ being fixed in terms of FR.22-C, Government of Bihar, on
16.11.00 issued Office Order stating that pay fixation in
terms of FR.22-C was irregular and illegal. It directed all:
the principals/headmasters of Nationalized Schools to re-
fix the pay of the teachers in terms of provisions ot B
FR.22(1)(a)(2) and recover the excess payment made from/
the date of initial fixation of pay under FR.22-C. Appellants
filed Writ Petitions for quashing the Office Order. Single
~
I Judge of High Court held that FR.22(1 )(a)(1) and
FR.22(1)(a)(2) would be applicable in fixation of pay scale c
of teachers of the Nationalised Schools and that Office
Order dated 16.11.2000 would apply prospectively and
not retrospectively. It set aside the direction given for
recovery of amount paid in excess. State of Bihar as well
as the appellants filed letters patent appeals. Division D
Bench of the High Court allowed the letters patent
appeals filed by State of Bihar and dismissed those filed
by appellants. It held that the pay of the appellants-
teachers would be fixed as per FR.22(1)(a)(2) and not
according to FR.22-C. It directed the State Government
E
to recover the amount paid in excess in reasonable
installments. Hence the present appeals.
Partly allowing the appeals, the Court
HELD:1.1. In the instant case, the post of Assistant
Teachers, on promotion to the higher/selection grade, F
does not carry any duties and responsibilities of greater
~ -i importance than those attached to the post held by them
regularly prior thereto. On the day the Resolution was
issued by the State Government, i.e., 18th December,
1989, which laid down the criteria for fixation of pay, etc.,
FR.22-C was not even in existence. It appears that on the
G
day the Resolution was issued by the State Government
on 18.12.1989, the official$ of State of Bihar, who were
responsible for issuing the Resolution, were unaware of
, the fact that FR.22-C had already been substituted and
H
920 SUPREME COURT REPORTS [2ooa1 11 ·s.c.R.

A in place thereof FR.22(1)(a)(1) and FR.22(1)(a)(2) had been
.inserted as otherwise there was no reason to apply the
rule-which had already been substituted to the
appellants-teachers and not the rule which 'was there on
the statute book on the day of issuance of the Resolution
i.e., the substituted provisions of FR.22-C. [Para 21] [937-
8 8-C; F-A]
1.2.Clause 13 makes it clear that vide Resolution
dated 18.12~ 1989 the State Government decided that the
provisions under the Central Government regarding
training, eligibility for appointment and promotion and
c other service conditions would be made applicable as far
as possible to the teachers of the Nationalised. School in
the State of Bihar and that their pay fixation on promotion
shall be governed by FR.22-C and instructions issued by
the Central Gover·nment for their teachers from time to
D time. Therefore, in the light of Clause 13, the submission
that even after substitution of FR.22-C, the pay fixation
on promotion would still be governed by the said rule and
not by the amended rule is rejected. Having regard to the
provisions of Clause 13 of Resolution dated 18.12.1989,
E pay fixation on promotion of the assistant teachers of
Nationalised Schools in the State of Bihar would be

F
governed by FR.22(1)(a)(1) and FR.22(1)(a)(2), as the case
may be, and not by FR.22-C, which was not even in
existence on the day Resolution dated 18.12.1989 was
issued by the Finance Department of the Government of
Bihar. Insofar as the appellants-teachers are concerned,
-
",

since they were not discharging any duties and
responsibilities of greater importance on their promotion
to the higher post/grade, which is sine qua non for being
eligible for an additional increment, they would be
G governed by FR.22(1)(a)(2) and not by FR.22(1)(a)(1t [Paras
22 and 23] [938-C-G]
1.3. Ordinarily, it would have been held that the
amended provisions of FR.22-C would apply to the
appellants-teachers w.e.f. 16.9.1989, i.e., the date from
H
SYED ABDUL QADIR & ORS. v. STATE OF BIHAR & 921
ORS.

which the amended provisions of FR.22-C were notified. A
But, in the peculiar facts and circumstances of the instant
·- -1,
case and having regard to the fact that the State
Government did not move this Court against the decision
of the Division Bench whereby letters patent appeal
preferred by the State Government challengingjudgment · 8
o.f .the Single Judge holding that Resolution dated
20.2.1993 amending sub-clause (ii) of Clause 13 of the ·
Resolution would apply to the class of teachers referred
to in the said sub-clause prospectively i.e., w.e.f. the date
of issuance of the Resolution dated 20.2.1993, was
dismissed. FR.22(1)(a)(2) shall apply to the teachers of C
Secondary Schools also w.e.f. 20.2.1993. [Para 24] [939-
G-C]
1.4. Relief has been granted against recovery of
excess payment of emoluments/allowances if (a) the
excess amount was not paid on account of any ' D
misrepresentation or fraud on the part of the employee
and (b) if such excess payment was made by the
employer by applying a wrong principle for calculating
the pay/allowance or on the basis of a particular '
interpretation of rule/order, which is subsequently found E
to be erroneous. 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 a given case, it is proved F
. 1
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 a short time of wrong payment, the matter being
in the realm of judicial discretion, courts may, on the facts
1

and circumstances of any particular case, order for G
recovery of the amount paid in excess. [Para 27] [941-E- '
A]
Sahib Ram vs. State of Haryana 1995 Supp. (1) SCC
18; Shyam Babu Verma vs. Union of India 1994 (2) SCC 521;
H
922 SUPREME COURT REPORTS [2008] 17 S.C.R.

A Union of India vs, M. Bhaskar 1996 (4) SCC 416; V. Ganga
Ram vs. Regional Jt. Director 1997 (6) SCC 139; Co/. B.J.
Akkara [Retd.] vs. Government of India and Ors. 2006 (11)
SCC 709; Purshottam Lal Das and Ors. vs. State of Bihar
2006 (11) SCC 492; Punjab National Bank and Ors. vs.
B Manjeet Singh and Anr. 2006 (8) SCC 647 and Bihar State
Electricity Board and Anr. vs. Bijay Bahadur ang Anr. 2000
(1 O) sec 99, relied on.
1.5. The excess amount that has been paid to the
appellants-teachers was not because of any
c 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. The Finance Department in its counter affidavit
admitted that it was a bona fide mistake on their part. The
excess payment made was the result of wrong
D 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. Majority of the beneficiaries have
E either retired or are on the verge of it. [Para 28] [942-C-F]
1.6. Keeping in view the peculiar facts and
circumstances of the case at hand and to avoid any
hardship to the appellants-teachers, the impugned
judgment so far as it relates to the direction given for
F recovery of the amount that has been paid in excess to
the appellants-teachers is set aside and that part of the
impugned judgment whereby it was held by the Division
Bench that the amended provisions of FR.22-C would
apply to the appellants-teachers is upheld. It is directed
G that no recovery of the excess amount that has been paid
to the teachers of Secondary Schools be made,
irrespective of the fact whether they have moved thisl
Court or not. It is also directed that the amount that has ~
been recovered from some of the teachers, after the
H impugned judgment was passed by the High Court,
SYED ABDUL QADIR & ORS. v. STATE OF BIHAR & 923
.., ORS .

irrespective of the fact whether they have moved this A
Court or not, be refunded to them [Para 30]
"' \
Case Law Reference:
1995 Supp. (1) sec 1a Relied on. Para 27
1994 (2) sec s21 Relied on. Para 27
1996 (4) sec 416 Relied on. Para 27 B
1997 (6) sec 139 Relied on. Para 27
2006 (11) sec 109 Relied on. Para 27
_.; ~
I 2006 (11) sec 492 Relied on. Para 27
2006 (8) sec 647 Relied on. Para 27 c
2000 (10) sec 99 Relied on. Para 27
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.
3351-3354 of 2003.
From the Judgment and final Order dated 17.7.2002 of the
High Court of Judicature at Patna in LPA No. 853 of 2001, LPA D
No. 893 of 2001, LPA No. 897 of 2001 & LPA No. 971 of 2001.
~ WITH
Civil Appeal Nos. 3355 of 2003 and 3364 of 2003.
P.S. Mishra, Shanti Bhushan, Akhilesh Kumar Pandey,
E
Sudhanshu Saran, Neeraj Shekhar, Rajesh Kumar, Ambhoj
Kumar, M.K. Choudharuy, S.K. Verma for the Appellants.
\
Rakesh Dwivedi, Mohit Kumar Shah, Muti Chaudhary,
,
Shantanu Krishna, Ravi Bhushan, Gopal Singh for the
Respondents.

- .., The Judgment of the Court was delivered by
B.N. AGRAWAL, J. 1. These appeals by special leave are
directed against the common judgment of Patna High Court
F

whereby a Division Bench of that Court dismissed letters patent
appeals preferred by the appellants herein against that part of G
the judgment of the learned Single Judge in which it was
decided that Office Order dated 16.11.2000 issued by the
Finance Department, Government of Bihar, providing that
""' of
fi)(a\ion of pay scale on promotion Assistant Teachers of the
Government taken over Schools [the Nationalised Schools] in
H
924 SUPREME COURT REPORTS [2008] 17 S.C.R.
.
,.

A the State of Bihar shall be governed by Fundamental Rule
r'
22(1 )(a)(2) [FR.22(1)(a)(2)] instead of Fundamental Rule 22-C i
I.?!
[FR.22-C], was valid. By the same judgment, the Division Bench ./
._
allowed letters patent appeals preferred by the State of Bihar
and set aside that part of judgment of the learned Single Judge
whereby it was decided that Office Order dated 16.11.2000 '•
I
B
would apply prospectively and not retrospectively and that
recovery of the amount paid in excess in ·breach of
·-
.-
).
>--
FR.22(1)(a)(2) from the appellants was not to be made. While .....
setting aside the judgment of the learned Single Judge and 1 I=
holding that, since Office Order dated 16.11.2000 only
c reiterated that the amended provisions of FR.22-C would apply
and not FR.22-C, the question of its applicability with
retrospective or prospective effect did not arise, the Division
Bench directed that the excess amount paid to the employees
be recovered without interest in at least 50 instalments _
D provided such an employee had the tenure of 50 months or more
so that such an employee did not suffer unnecessary brunt of
a cut in the salary. ~

2. While Civil Appeal Nos. 3351-54 and 3364 have been
preferred by the aggrieved Assistant Teachers of the
....
E Nationalised Schools, Civil Appeal No. 3355 has been
preferred by the Bihar Secondary Teachers Association.
3. We now proceed to the facts relevant for the disposal ~

of these appeals. The appellants herein are the Assistant
Teachers of the Nationalised Schools in the State of Bihar,
F administrative control of which lies with the Department of
Human Resource Development, Government of Bihar.
Exercising powers under Section 9 of the Bihar Non- '""
...
Government Secondary School [Take Over of Management and
Control] Act, 1981, the State Government vide Notification No.
G 12/B 8-760/75-398 dated 9th June, 1983 framed Bihar
Nationalised Secondary School [Service Condition] Rules,
1.983 [hereinafter referred to as 'the 1983 Rules'] and under -
rute 3 of the 1983 Rules, the secondary school teachers of the r
Nationalised Schools were categorised. The hierarchy of
,,
promotion of these teachers was from the post of Assistant ...
H

.
I·
SYED ABDUL QADIR & ORS. v. STATE OF BIHAR & 925
ORS. [B.N. AGRAWAL, J.]

Teacher [Junior Grade] to the post of Assistant Teacher A
[Subordinate Grade], then to the post Assistant Teachers
....) [Selection Grade] and finally to the post of Head Master, which
was the highest promotional post. Rule 17 of the 1983 Rules
provided that the pay scale of the teachers of the Nationalised
Secondary Schools would be determined as per Bihar Service B
Code and Rules issued by the State Government from time to
time. At that point of time, the time scale of these teachers was
regulated under Rule 78 of the Bihar Service Code. In order to
t remove anomaly in the pay scales of teachers of the
Nationalised Schools in the State of Bjhar and in terms of
Bipartite Agreement entered into between the State c
Government on the one hand and Secondary School Teachers
Association and other Unions on the other, the Finance
Department, Government of Bihar, vide its Resolution dated
18th December, 1989 took a decision with regard to revision
of pay scales of teachers of the Nationalised Schools based D
on the recommendations of the 4th Pay Revision Committee
appointed by the State Government, which recommendations
'1' were made applicable to all the teachers who were in service
on 1st January, 1986 and those who joined or were promoted
thereafter. Clause 13 of the said Resolution provided that E
revised pay scales indicated in Schedule II of the said,
Resolution would be extended to the teachers of Nationalised
Schools and the provisions relating to such teachers in the
Central Government regarding training, eligibility for
appointment and promotion and other service conditions would
F
be made applicable to them as far as possible. Sub-clause (ii)
? of Clause 13 provided that teachers who were in receipt of
promotion or time bound promotion into the Junior Selection
Grade and had completed 12 years of service in the basic
grade prior to 1.1.1986 shall have their pay fixed in the ,revised
senior scale as indicated in Schedule II of the Resolution. G
However, those teachers who got promotion or time bound
promotion into the junior selection grade but had not completed
=t 12 years of service in the basic grade on 1.1.1986, shall have
their pay fixed in the revised scale in the basic grade only on

r
1.1.1986 and they were to be extended the benefit of H
926 SUPREME COURT REPORTS [2008] 17 S.C.R.

A promotion and fixation of pay in the senior scale with effect from
the date they completed 12 years of service. Sub-clause (iii)
of Clause 13 laid down that those teachers who received
promotion into junior selection grade or first time bound
promotion after 1.1.1986 but before 1.3.1989 shall be given the
benefit of promotion for the purpose of fixation of their pay in
8
the revised scale only w.e.f. the date they have received
promotion or from the date on which they complete 12 years
of service, whichever is later. Sub-clause (vii) of Clause 13
provided that the existing procedure of fixation of pay on
promotion will cease to be applicable to teachers in the revised
C pay-scales w.e. f. 1.1.1986 and in their case the pay fixation on
promotion would be governed by FR.22-C and instructions
issued by the Central Government from time to time and not
as per the existing procedure. It may be mentioned here that
Department of Personnel and Training, Government of India,
D vide its Notification dated 30th August, 1989, published in the
Gazette of India on 16th September, 1989, i.e., before
Resolution dated 18th December, 1989 issued by the Finance
Department of Government of Bihar came into force, deleted -t
FR.22-C and in its place inserted FR.22(1)(a)(1) and
E FR.22(1)(a)(2).
4. On 20.2.1993 the Finance Department, Government of
Bihar, issued another Resolution whereby Clause 13(ii) of its
earlier Resolution dated 18.12.1989 - which provided that the
category of teachers mentioned in the said clause would be
F extended the revised senior sc~le on completion of 12 years
of service in the basic grade and that their pay in the senior
scale shall be fixed as per FR.22-C - was amended to the
effect that pay of these teachers, on completion of 12 years of
service in the basic grade shall be fixed as per Rule 78(ii) of
the Bihar Service Code. It may be mentioned that while under
G FR.22-C there was provision for grant of an additional
increment on promotion to the higher post carrying duties and
responsibilities of greater importance, there was no such
provision under Rule 78(ii). However, despite the amendment
aforesaid, the Human Resources Department of the
H Government of Bihar, vide Notification dated 24.6.1993,
SYED ABDUL QADIR & ORS. v. STATE OF BIHAR & 927
ORS. [B.N. AGRAWAL, J.]

reiterated that pay fixation of teachers shall be made as per A
FR.22-C. Upon objection by the Audit Team of the Office of the
"" .,,..I Accountant General, Bihar, in regard to payment of pension,
etc. to the concerned teachers on the basis of their last pay
scale which was fixed as per FR.22-C and on being asked to
provide information about the amendment/deletion of FR.22- B
C, the Kendriya Vidalaya Sangathan informed the Office of the
Accountant General that pay fixation of teachers in senior/
selection scale was to be made under FR.22(1 )(a)(2), and that
> notional increment was not admissible. Some of the elementary
..;.
school teachers, who were affected by the Resolution dated
20.2.1993, filed a Writ Petition before the High Court of Patna, c
being CWJC No. 2405 of 1997 challenging Resolution dated
20.2.1993. The learned Single Judge vide its judgment dated
17.9.1997 disposed of the writ petition and while holding that . '

the Resolution dated 20.2.1993 would come into effect only
prospectively, directed that the said Resolution was not D
applicable in the cases of the petitioners of that Writ Petition
•., in the matter of fixation of pay on promotion/conversion granted
prior to 20.2.1993, forbidding the respondent-State of Bihar
from reviewing the fixation of pay of the petitione.rs made prior
to the said Resolution. Aggrieved, the State of Bihar challenged E
the judgment of the learned Single Judge by way of letters
patent appeal, which having been dismissed for failure on the
part of the State Government for taking required steps, a
special leave petition was preferred before this Court, which
was also dismissed. After the dismissal of the special leave
petition by this Court, the State of Bihar filed letters patent F
. ~ appeal challenging that very judgment of the learned Single
Judge, against which the special leave petition had been
dismissed. A Division Bench of the High Court vide its
judgment dated 17th February, 2000 dismissed the letters
patent appeal on merits, which judgment of the Division Bench G
was not challenged by the State of Bihar before this Court
5.. Meanwhile, after the dismissal of the special leave
-)'
petition by this Court, the Director, Secondary Education,
Government of Bihar, vide his letter dated 8.1.1999 requested

I the Accountant General to inform him about any decision of the H
928 SUPREME COURT REPORTS [2008) 17 S.C.R.

A State Government with regard to the applicability of amended
provision regarding fixation of pay on promotion to the higher 1 A

scale. The Accountant General in turn wrote to the Finance -J.>- ·,
Department, Govt. of Bihar, in this regard.
6. On coming to know of the instances of pay on
B promotion being fixed in terms of FR.22-C, the Finance
Department, Government of Bihar, on 16.11.2000 issued an
Office Order to the Departments of Primary and Mass
Education, Secondary Education and Primary Education,
~
stating that pay fixation in terms of FR.22-C was irregular and ~

c illegal because the said rule had been substituted before the
said date and no higher responsibility and duties were attached
to the promotion post. Accordingly, it directed all the principals/
headmasters of Nationalized Schools to re-fix the pay of the
teachers in terms of provisions of FR.22(1)(a)(2) and recover
the excess payment made from the date of initial fixation of pay
D under FR.22-C in one instalment, authorizing the Drawing and
Disbursing Officer concerned to recover the excess amount in
maximum 20 instalments, if requested.
.r
7. Aggrieved by the said Office Order, the appellants
herein and others similarly situated, filed Writ Petitions before
E the High Court of Patna, inter alia, for quashing Office Order
dated 16.11.2000 and for issuing directions to the respondents
not to reduce their pay scale and to allow them to continue in
.. the scale which was fixed as per FR.22-C. A learned Single
Judge of the High Court, while holding that FR.22(1 )(a)(1) and
F FR.22(1 )(a)(2) would be applicable in fixation of pay scale of
teachers of the Nationalised Schools and that Office Order ~
dated 16.11.2000 would apply prospectively and not
retrospectively, quashed that part of the Office Order whereby
direction for recovery of amount paid in excess was given. The
G State of Bihar as well as the appellants herein and others
similarly affected laid a challenge against the judgment of the
learned Single Judge by way of letters patent appeals before
the High Court. While the State of Bihar challenged that part of ~~

the judgment of the learned Single Judge whereby it was held
that the Resolution dated 16.11.2000 would apply prospectively
H
SYED ABDUL QADIR & ORS. v. STATE OF BIHAR & 929
. ORS. [B.N. AGRAWAL, J.]
I 1
1
and ndt rettospectively and amainst the direction for no recovery A
of amount paid in excess, the appellants herein and others
• i challenged that part of the judgment whereby it was held that
...)
FR.22(1)(a)(1) and FR.22(1)(a)(2) would apply in fixation of pay
of the teachers of the Nationalised Schools. As stated above,
a Division Bench of the High Court allowed the letters patent B
appeals preferred by the State of Bihar and dismissed those
preferred by the appellants herein and others similarly situated,
holding that the cases of the appellants - teachers would be
governed by FR.22(1)(a)(2), their fixation of pay would be made
...,
~
according to the amended rule i.e, FR.22(1)(a)(2) and not
according to FR.22-C, directing the State· Government t'o
c i

recover the amount paid in excess in reasonabl~ installments.
8. Pursuant to the aforesaid directions of the High Court,
the Finance Department, Government of Bihar, issued an Office
Order dated 12.9.2002 stating that payment of salary from the
month of September, 2002 would be made only if the drawing D.
and disbursing authority certified that the pay scale of all the
. teachers had been re-fixed and steps for realization of the
amount paid in excess in installments had been initiated.
9. Aggrieved by the judgment of the Division Bench, the
appellants have filed these appeals by special leave. E
10. We now turn to the rival submissions of learned counsel
..
appearing on behalf of the parties. Shri P.S. Mishra, learned
senior counsel, appearing on behalf of the appellants, submitted
that in terms of Clause 13(vii) of Resolution dated 18.12.1989 ..
of the Finance Department, Government of Bihar, the pay F
fixation of the appellants on promotion was rightly made in terms
of the provision contained in FR.22-C as the said rule provided
for grant of additional increment at the time of promotion to
higher grade. Mr. Mishra further submitted that FR.22-C having
been incorporated by adoption in the Resolution dated G
18.12.1989, deletion of the said rule prior to its adoption in the
Resolution or any amendment or substitution of that rule would
not automatically delete, amend or substitute the same and,
therefore, the benefit of additional increment on promotion was
rightly extended to the appellants. The next submission of the H
930 SUPREME COURT REPORTS [2008] 17 S.C.R.

A learned counsel is that since Office Order dated 1-6J 1.2000
provided for fixation of pay of the appellants - teachers in terms
of the amended provision i.e., FR.22(1)(a)(2), the said Order
would apply prospectively and not retrospectively. Alternatively,
it is submitted that in view of the fact that decision of the learned
Single Judge in CWJC No. 2405 of 1997 holding that the
8
amendment of Clause 13(ii) of Resolution dated 18.12.1989
by Resolution dated 20.2.1993 in the case of assistant teachers
of primary schools would apply prospectively i.e., w.e.f. from
20.2.1993, had attained finality, the letters patent appeal
against which having been dismissed by the Division Bench
C of the High Court and the State of Bihar having not challenged
the said decision before this Court, the que~tion of making the
Office Order effective from a date prior to Q0.2.1993 does not
.
'

arise. It has also been submitted that eveh if it were to be held
that the appellants were not entitled to the benefit of additional
D increment on promotion, the excess amount that has been paid
to the appellants cannot and should not be recovered; it having
been paid without any misrepresentation or fraud on the part
of the appellants herein. -1
11. Per contra, Shri Rakesh Dwivedi, learned senior
E counsel appearing on behalf of the respondents, submitted that
since FR.22-C, which was not even in existence on the day of
issuance of Resolution dated 18.12.1989 wherein reference of
it was made, the same having been substituted by
FR.22(1)(a)(1) and FR.22(1)(a)(2), was not adopted and was only
F referred to in the said Resolution, the cases of the appellants
would be governed by the amended provision and not FR.22-
C. Alternatively, it is submitted that even if it were to be held ;:..
that cases of the appellants would be governed by FR.22-C and
. not by the amended provisions, the appellants [assistant
teachers], on their promotion to the higher/selection grade,
G would still not be entitled to the benefit of additional increment
provided under FR.22-C as, admittedly, on their promotion to
the higher/selection grade, they were not discharging any duties
and responsibilities of greater impo.rtance. It is further submitted t·
that as the question whether FR.22-C or its amended provision
H would apply in the case on hand was not the subject matter of
SYED ABDUL QADIR & ORS. v. STATE OF BIHAR & 931
ORS. [B.N. AGRAWAL, J.]

the decision rendered in CWJC No. 2405 of 1997, it having A·
decided the cases of the assistant teachers covered by Clause
13(ii) of the Resolution whereas in these appeals the cases of
rest of the teachers covered by Clause (vii) are to be decided,
the said decision is not at all relevant for deciding the issue at
hand. s
12. Before adverting to the respective submissions made
by the learned counsel appearing on behalf of the parties, it
would be useful to refer to Clause 13 of Resolution dated
18.12.1989, Rule 78 of the Bihar Service Code, FR.22-C, as
it existed prior to its substitution, and FR.22(1)(a)(1) and c
FR.22(1)(a)(2), which replaced FR.22-C.
13. Clause 13 of Resolution dated 18.12.1989 deals with
revision of pay scale of assistant teachers of the Nationalised
Schools and fixation of pay on their promotion, relevant portion
of which runs thus:- D
"Clause 13. The State Government have decided that
revised pay scale indicated in Schedule II be extended to
teachers in these schools and the provisions under the
Central Government regarding training, eligibility for
appointment and promotion and other service conditions E 1

be made applicable to them as far as possible. Thus, the
efficiency bars in their pay scales shall also continue. The
following principles have been laid down for fixation of pay
in the revised scale. These provisions shall be applicable
to all teachers except those having matric [Untrained] or
lower qualification:- F
·• { (i) All those teachers who were in the basic grade on
1st January, 1986, shall have their revised pay fixed
in the basic grade indicated in Schedule II.
(ii) All those teachers who were in receipt of promotion G
or time bound promotion into the Junior Selection
Grade and had completed 12 years of service in
the basic grade prior to 1st January, 1986 shall
i -'! have their pay fixed in the revised senior scale
indicated in Schedule II. Those teachers who were
H

f
..
932 SUPREME COURT REPORTS [2008] 17 S.C.R.
,.
A in receipt of promotion - time bound promotion into "'
the junior sel.ection grade prior to 1st January, 1986
but had not completed 12 years of service in the I A

basic grade on that date shall also have their pay
\..-
•
fixed in the revised scale in the basic grade only
on the 1st day of January, 1986. Benefit of
B
promotion and fixation of pay in senior scale shall
be given to them with effect from the date they
complete.12 years of service.
(iii) Those teachers who have received promotion into ~
~-
junior selection grade or first time bound promotion
c after 1st January, 1986 but before 1st March, 1989
shall be given the benefit of promotion for the
purpose of fixation of their pay in the revised scale
only with effect from the date they have received
promotion, or date on which they complete 12 years
D of service whichever is later.
(iv) Those teachers who have been promoted into
senior selection grade and have also completed 12 ...
years of service or have received second time -1
bound promotion on completion of 25 years of
E service prior to 1st January, 1986 shall also have
their pay fixed in the revised senior scale.
Promotion into the senior selection grade or second
time bound promotion after 1st January, 1986 shall
be ignored for the purpose of fixation of pay in the
F revised scale.
(v) Benefit of selection scale in the revised scale of pay
shall be extended to teachers in accordance with
7- •.
availability of post and the procedure and
conditions prescribed by the Central Government
G for their teachers which would be deemed to have
been in force with effect from 1st January, 1986.
································································
(vi) ......................................................... ."'!-

(vii) The existing procedure of fixation of pay on
H
SYED ABDUL QADIR & ORS. v. STATE OF BIHAR & 933
ORS. [B.N. AGRAWAL, J.]

promotion will cease to be applicable to teachers A
in the revised pay scales with effect from 1st
;;... I January, 1986. In their case the pay fixation on
- ..J promotion shall be governed by rule 22-C of the'
Fundamental Rules and instructions issued by the
Central Government for their teachers from time to
8
time. The fixation of pay on promotion referred to
in sub-paragraphs (ii), (iii), (iv) & (v) shall also be
governed by tffose provisions.';- ·· ·- ·
14. While sub-clauses (ii), (iii), (iv) and (v) of Clause 13
lay down the procedure to be adopted for fixation of pay on C
promotion in respect of different classes of teachers mentioned 1

in these sub-clauses, sub-clause (vii) provides that the pay!
fixation of teachers referred to in sub-clauses (ii), (iii), (iv) and
(v) shall be governed by FR.22-C and instructions issued by
the Central Government from time to time.
D
15. Rule 78 of the Bihar Service Code, which governed
the fixation of pay of the appellants - teachers prior to 1.1.1986,
reads as under:-
"Rule 78.- The initial substantive pay of a Government.
servant who is appointed substantively to a post on a time-j E
scale of pay is regulated as follows:-
(a) If he holds lien on a permanent post other than a
tenure post, or would hold a lien on such a post had
his lien not been suspe- nded:-
(i) When appointment to the new post involved F
the assumption of duties or responsibilities
of greater importance [as interpreted for the
purpose of rule 89] than those attached to.
such permanent post, he will draw as initial:
pay the stage of the time-scale next above G
his substantive pay in respect of the old post.
(ii) When appointment to the new post does not
involve such assumption, he will draw as
initial pay the stage of the time-scale which
is equal to his substantive pay in respect of H

I
'
934 SUPREME COURT REPORTS [2008] 17 S.C.R.

A the old post, or, if tttere is no such stage the
stage next below that pay, plus personal pay I

equal to the difference and in either case will I~
\,.. ..,,...
continue to draw that pay until such time as
he would have received an increment in the
time-scale of the old post,· or for period after
B
which an increment is earned in the time-
scale of new post, whichever is less. But if
the minimum pay of the time-scale of the new
post is higher than his substantive pay in
....
respect of the old post, he will draw that ~

c minimum as initial pay."
16. A plain reading of sub-rule (i) of Rule 78 makes it clear
that an incumbent, on being appointed to the new post, involving
the assumption of duties or responsibilities of greater
importance than those attached to such permanent post, will
D draw as initial pay the stage of the time-scale next above his
substantive pay in respect of the old post, but in the event of
appointment to the new post, not involving such assumption, the ....
fixation of pay will be done under sub-rule (ii) of Rule 78
f
according to which, he will draw as initial pay the stage of the
E time-scale which is equal to his substantive pay in respect of
the old post. or, if there is no such stage the stage next below
that pay, plus personal pay equal to the difference and in
either case will continue to draw that pay until such time as
he would have received an increment in the time-scale of the
F old post It may be mentioned here that under Rule ·78(i) of
the Bihar Service Code, there is no provision of granting of
additional increment while fixing the basic pay of the higher
post, which appear to be the reason for ignoring the said rule
) ...
by the State Government and deciding to have the central
pattern vide FR.22-C and instructions issued by the Central
G Government from time to time in the case of pay fixation on
promotion vide Resolution dated 18.12.1989.
17. FR.22-C, which was substituted even prior to the
issuance of Resolution dated 18.12.1989, and was replaced J-
by FR.22(1)(a)(1) and FR.22(1)(a)(2), read thus:-
H

'
/'
SYED ABDUL QADIR & ORS. v. STATE OF BIHAR & 935
ORS. [B.N. AGRAWAL, J.]

"F.R.22-C.- Notwithstanding anything contained in these, A
Rules, where a Government Servant holding a post in a
substantive, temporary or officiating capacity is promoted
or appointed in a substantive, temporary or officiating
capacity to another post carrying duties and
responsibilities of greater importance than those attaching'
8
to the post held by him, his initial pay in the time-scale of
the higher post shall be fixed at the stage next above the,
pay notionally arrived at by increasing his pay in respect
I
of the lower post by one increment at the stage at which
I
such pay has accrued:
Provided that the provisions of this rule shall not
c
apply where a government servant holding a Class I post
in a substantive, temporary or officiating capacity is
promoted or appointed in a substantive, temporary or
officiating capacity to a higher post which is also a Class
I post." D
18. A reading of FR.22-C makes it clear that benefit of an
additional increment would be extended to a government
servant in the event of his being promoted or appointed to a
substantive, temporary or officiating capacity to another post
carrying duties and responsibilities of greater importance than E
those attaching to the post held by him. As aforesaid, FR.22,-
C was substituted even prior to the issuance of Resolution
dated 18.12.1989 and was replaced by FR.22(1)(a)(1) and
FR.22(1)(a)(2), relevant portions of which are quoted
hereinbelow:- F
"FR.22(1). - The initial pay of a government servant who is
appointed to a post on a time-scale of pay is regulated
as follows:-
(a)(1 ).- Where a government servant holding a post, other
than a tenure post, in a substantive or temporary or G
officiating capacity is promoted or appointed in a
substantive, temporary or officiating capacity, as the case
may be, subject to the fulfillment of the eligibility conditions
as prescribed in the relevant Recruitment Rules, to anoth~r
H

...
I -
936 SUPREME COURT REPORTS [2008] 17 S.C.R.

A post carrying duties and responsibilities of greater
importance than those attaching to the post held by him,
his initial pay in the time-scale of the higher post shall be I AO

fixed at the stage next above the notional pay arrived at
\..- -
by increasing his pay in respect of the lower post held by
him regularly by an increment at the stage at which such
B
pay has accrued or rupees one hundred only whichever is
more."
~'fR.22(1)(a)(2).- When the appointment to the new post
does· not involve such assumption of duties and
responsibilities of greater importance, he shall draw as
'
\.·

c initial pay, the stage of the time-scale which is equal to his
pay in respect of the old post held by him on regular basis,
or, if there is no such stage, the stage next above his pay
in respect of the old post held by him on regular basis."
19. Rule 22(1)(a)(1) provides that when a government
D
servant is promoted or appointed to a higher post and the
higher post he is promoted carries duties and responsibilities
of greater importance than those attaching to the post held by
,...
him, his initial pay in the time-scale of the higher post shall be 1
fixed at the stage ·next above the notional pay arrived at by
E increasing his pay in respect of the lower post held by him
regularly by an increment at the stage at which such pay has
accrued or rupees one hundred only whichever is more.
According to FR.22(1)(a(2), the benefit of an additional
increment, which is available to a government servant under
F FR.22(1)(a)(1), would not be available to the government servant
if the higher post he is promoted or appointed to does not carry
-\ ...;.
duties and responsibilities of greater importance than those /
attaching to the post held by him. Even, according to FR.22-C,
the additional increment was to be granted only in cases where
G the incumbent on promotion or appointment to ahigher post
has to discharge the duties and responsibilities of greater
importance. Therefore, in cases where on promotion or I

appointment to the higher post no duties and responsibilities
of greater importance - than those being dis~harged in the post Y-
held by the incumbent regularly prior to the promotion - were
H
SYED ABDUL QADIR & ORS. v. STATE OF BIHAR & 937
ORS. [B.N. AGRAWAL, J.]

to be discharged by the government servant, the pay fixation A
formula is provided for under FR.22(1)(a)(2) according to which
'"" -.Jt benefit of additional increment is not to be extended at the time
of fixation of pay on the promotional post.
20. The primal question for consideration in these appeals
is as to whether provisions of FR.22-C or FR.22(1)(a)(1) and 8
FR.22(1)(a)(2) would apply to the appellants-teachers.
21 . The admitted position in the case on hand is that the
post of Assistant Teachers, on promotion to the higher/selection
grade, does not carry any duties and responsibilities of greater
importance than those attached to the post held by them c
regularly prior thereto. It is also admitted position that on the
day the Resolution was issued by the State Government, i.e.,
18th December, 1989, which laid down the criteria for fixation
of pay, etc., FR.22-C was not even in existence. The
submission of the learned counsel appearing on behalf of the D
appellants is that it is FR. 22-C which is applicable to the case
,A. of the appellants herein and not FR.22(1)(a)(1) or FR.22(1)(a)(2)
~
as, according to him, FR.22-C was incorporated by adoption
in the Resolution and deletion of the said rule prior to its
adoption in the Resolution dated 18.12.1989 and any
amendment or substitution of that rule would not automatically E
delete, amend or substitute the same. This submission of Shri
Mishra, even if it were to be accepted, would be of no help to
the appellants herein as even under FR.22-C an incumbent
would get benefit of additional increment at the time of fixation
of pay only in the event of the higher post, he is promoted or F
>· I appointed, carries duties and responsibilities of greater
importance, which admittedly is not so in the case on hand. It
appears that on the day the Resolution was issued by the State
Government, i.e., on 18.12.1989, the officials of the State of
\

Bihar, who were responsible for issuing the Resolution, were .G
unaware of the fact that FR.22-C had already been substituted
and in place thereof FR.22(1)(a)(1) and FR.22(1)(a)(2) had been
inserted as otherwise there was no reason to apply the ru~e -
which had already been substituted - to the appellants- ·
teachers- and not the rule which was there on the statute book
H
938 SUPREME COURT REPORTS [2008] 17 S.C.R.

A on the day of issuance of the Resolution i.e., the substituted
provisions of FR.22-C. As quoted above, Clause 13 of
Resolution dated 18.12.1989 begins with, "the State
Government have decided that revised pay scale indicated
in Schedule II be extended to teachers in these schools and
B the provisions under the Central Government regarding
training, eligibility for appointment and promotion and other
service conditions be made applicable to them as far as
possible" and sub-clause [vii] thereof, provides that "pay
fixation on promotion shall be governed by rule 22-C of the
C Fundamental Rules and instructions issued by the Central
Government for their teachers from time to time".
22. Clause 13, therefore, makes it clear that vide
,. Resolution dated 18.12.1989 the State Government decided
that the provisions under the Central Government regarding
training, eligibility for appointment and promotion and other
0
service conditions would be made applicable as far as possible
to the teachers of the Nationalised School in the State of Bihar
and that their pay fixation on promotion shall be governed by
FR.22-C and instructions issued by the Central Government for
their teachers from time to time. Therefore, in the light of what
E is provided µnder Clause 13 of the said Resolution, as
aforesaid, the submission that even after substitution of FR.22-
C, the pay fixation on promotion would still be governed by the
said rule and not by the amended rule is bound to be rejected.
Having regard to the provisions of Clause 13 of Resolution
F dated 18.12.1989, we hold that pay fixation on promotion of the
assistant teachers of Nationalised·Schools in the State of Bihar
would be governed by FR.22(1)(a)(1) and FR.22(1)(a)(2), as the
case may be, and not by FR.22-C, which was not even in
existence on the day Resolution dated 18.12.1989 was issued
G by the Finance Department of.the Government of Bihar. Insofar
as the appellants-teachers are concerned, since they were not
discharging any duties and responsibilities of greater
importance on their promotion to the higher post/grade, which
is sine qua non for being eligible for an additional increment,
they would be governed by FR.22(1)(a)(2) and not by
H FR.22(1)(a)(1 ).
SYED ABDUL QADIR & ORS. v. STATE OF BIHAR & 939
ORS. [B.N. AGRAWAL, J.]

23. Since, having regard to the provisions of Clause 13 A
of the Resolution, we have held that appellants - teachers on
""- I
....) their promotion to the higher post/grade would be governed by
the amended provisions of FR.22-C, i.e., FR.22(1)(a)(1) and
FR.22(1)(a)(2) we need not go into the submission made by the
learned counsel appearing on behalf of the appellants that
B
FR.22-C having been incorporated by adoption in the
Resolution, deletion of the said rule prior to its adoption in the
Resolution or any amendment or substitution of that rule would
not automatically delete, amend or substitute the same.
24. The question that now arises is as to whether the c
amended provisions would have prospective or retrospective
application. It is the submission of learned counsel appearing
on behalf of the appellants - teachers that Office Order dated
16.11.2000, whereby instructions have been issued to fix the
pay of the appellants- teachers as per the amended provisions
of FR.22-C, i.e,. FR.22(1)(a)(2), should be applied prospectively D
and not retrospectively. Alternative submission in this regard is
"'i that since decision of the learned Single Judge in CWJC No.
2405 of 1997 holding that the amendment of sub-clause (ii) of
Clause 13 of Resolution dated 18.12.1989 by Resolution dated
20.2.1993 in the case of teachers referred to in the said sub- E
clause would apply prospectively i.e., w.e.f. from 20.2.1993, had
attained finality, the letters patent appeal against which having
been dismissed by the Division Bench of the High Court and
the State Government having not challenged the said decision
before this Court, the question of making the Office Order dated F
. ~;
16.11.2000 effective from a date prior to 20.2.1993 does not
arise. On the other hand, learned counsel appearing on behalf
of the respondents - State of Bihar submitted that insofar as
decision in CWJC No. 2405 of 1997 is concerned, it is not at
all relevant in the case on hand as the challenge in that writ
petition was to the amendment made in sub-clause (ii) of G
Clause 13 whereas in the case on hand, the cases of teachers
covered by sub-clauses (iii), (iv) and (v) of Clause 13 are to
-l
be decided. Ordinarily, we would have held that the amended I

provisions of FR.22-C would apply to the appellants - teachers
w.e.f. 16.9.1989, i.e., the date from which the amended H
940 SUPREME COURT REPORTS [2008] 17 S.C.R.

A provisions of FR.22-C-were notified. But, in the peculiar facts
and circumstances of this case and having regard to the fact I ->";
I

that the State Government did not move this Court against the \,- :
decision of the Division Bench whereby letters patent appeal
preferred by the State Government challenging judgment of the r~
learned Single Judge holding that Resolution dated 20.2.1993
B
amending sub-clause (ii) of Clause 13 of the Resolution would
~
,
apply to the class of teachers referred to ir\ the said sub-clause
prospectively i.e., w.e.f. the date of issuance of the Resolution
dated 20.2.1993, was dismissed, we hold that FR.22(1)(a)(2) ~
shall apply to the teachers of Secondary Schools also w.e.f.
c 20.2.1993. t
25. We now come to the question as to whether the
amount that has been paid in excess to the appellants-teachers
should be recovered or not. It is the submission of the learned
counsel appearing on behalf of the appellants - teachers that
D even if it were to be held that the appellants were not entitled
to the benefit of additional increment on promotion, the excess
;.._
amount that has been paid to the appellants cannot and should I

not be recovered; it having been paid without any r
misrepresentation or fraud on their part.
E 26. From the record that has been produced before us,
there is not an iota of doubt that officials of the State
Government, responsible for issuing Resolution dated ~

18.12.1989, were ignorant of the amended provisions of the
FR.22-C and it is their inaction, negligence and carelessness
F which has created all the chaos in the case on hand. Further,
until January 1999, the officials of the Education Department 'y_
..i

of the Government of Bihar were unaware of the amendment
in the said rule until the Accountant General, Government of
Bihar, on a query being made to him by the Director of
G Secondary Education, who js the head of the Department of
1--
the Secondary Education in the State of Bihar, vide his letter ·,_
dated 8.1.1999, responded to the said query that the officials
of the Education Department came to know of the amendment "-'!-
in FR. 22-C. That apart, it also appears from the record
produced before us that while the Finance Department of the
H
SYED ABDUL QADIR & ORS. v. STATE OF BIHAR & 941
ORS. [B.N. AGRAWAL, J.]

Government of Bihar was in favour of making the amended A
provisions of FR. 22-C applicable to the appellants-teachers
after having come to know that the said rule did not exist and
had been substituted, the Department of Human 'Resource
Development, Government of Bihar, wanted to apply the
unamended provision to the appellants-teachers so as to make 8
available the benefit of additional increment provided for under
FR.22-C to its teachers, unaware of the fact that even under
FR.22-C they were not entitled to the additional increment as
they were not discharging duties and responsibilities of greater
importance on the promoted post. This further goes on to show
that the authorities in the State of Bihar were not even aware c
of the basic requirement for grant of additional increment and
the decision appears to have been taken without proper
application of mind. Otherwise, there was no reason for the
Finance Department to state in the counter affidavit filed before
the High Court that any affidavit filed on behalf of the Education D
Department may be ignored as Finance Department was the
competent authority. In this very affidavit, the Finance
Department while admitting that the pay fixation by the
Education Department was wrong, stated as under:-
" ... the fixation of pay under Fundamental Rule 22-C has E
wrongly been made as it was not in existence. Pay fixation
on the basis of a non-existent rule is a bona fide mistake."
27. This Court, in a catena of decisions, has granted relief
against recovery of excess payment of emoluments/allowances
if (a) the excess amount was not paid on account of any F
misrepresentation or fraud on the part of the employee and (b)
if such excess payment was made by the employer by applying
a wrong principle for calculating the pay/allowance or on the
basis of a particular interpretation of rule/order; which is
subsequently found to be erroneous. The relief against recovery G
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 a given case, it is proved that the employee
had knowledge that the payment received was in excess of what H
942 SUPREME COURT REPORTS [2008] 17 S.C.R.

A was due or wrongly paid, or in cases where the error is
detected or corrected within a short time of wrong payment, I )-
th_e matter being in the realm of judicial discretion, courts may, \..-
on the facts and circumstances of any particular case, order I

for recovery of the amount paid in excess. See Sahib Ram vs. ~
B State of Haryana, 1995 Supp. (1) SCC 18, Shyam Babu
Verma VS. Union of India, [1994] 2 sec 521; Union of India
vs. M. Bhaskar, [1996] 4 SCC 416; V. Ganga Ram vs.
Regional Jt., Director, [1997] 6 SCC 139; Col. B.J. Akkara
[Retd.] vs. Government of India & Ors. (2006) 11 SCC 709; 1-
Purshottam Lal Das & Ors., vs. State of Bihar, [2006] 11 SCC
c 492; Punjab National Bank & Ors. Vs. Manjeet Singh & Anr.,
[2006] 8 SCC 647; and Bihar State Electricity Board & Anr.
Vs. Bijay Bahadur & Anr., [2000] 10 SCC 99.
28. Undoubtedly, the excess amount that has been paid
to the appellants - teachers was not because of any
D
misrepresentation or frau9 on their part and the appellants also
had no knowledge that the amount that was being paid to them
A
was more than what they were entitled to. It would not be out
of place to mention here that the Finance Department had, in r
its counter affidavit, admitted that it was a bona fide mistake
E 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
F Bihar. Learned counsel appearing on behalf of the appellants-
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 appellants-teachers, we are of the view that no
recovery of the amount that has been paid in excess to the
G
appellants-teachers should be made.
29. Learned counsel also submitted that prior to the interim
order passed by this Court on 7.4.2003 in the special leave )-
petitions, whereby the order of recovery passed by the Division .
Bench of the High Court was stayed, some instalments/amount
H ~
.. SYED ABDUL QADIR & ORS. v. STATE OF BIHAR &
ORS. [B.N. AGRAWAL, J.]
943

had already been recovered from some of the teachers. Since A

. . '
~'
we have directed that no recovery of the excess amount be
made from the appellant-teachers and in order to maintain
parity, it would be in the fitness of things that the amount that
has been recovered from the teachers should be refunded to
them. B
30. In the result, the appeals are allowed in part, the
impugned judgment so far as it relates to the direction given
for recovery of the amount that has been paid in excess to the
j
appellants - teachers is set aside and that part of the impugned
judgment whereby it has been held by the Division Bench that c
the amended provisions of FR.22-C would apply to the
appellants-teachers is upheld. We direct that no recovery of the
excess amount, that has been paid to the teachers of
Secondary Schools, be made, irrespective of the fact whether
they have moved this Court or not. We also direct that the
amount that has been recovered from some of the teachers, D
J.
after the impugned judgment was passed by the High Court,
irrespective of the fact whether they have moved this Court or
~
not, be refunded to them within three months from the date of
receipt of cop~cof this judgment.
N.J. Appeals partly allowed. E