Supreme Court Upholds State's Right to Rectify Erroneous Benefits Granted to Retired Government Officers

In a landmark decision, the Supreme Court has affirmed the state government’s authority to recover erroneously allocated benefits from retired government officials. The ruling emerged from a Civil Appeal filed by a retired Ayurvedic and Unani Medical Officer appointed on an ad-hoc basis.

The court’s decision, supported by the Division Bench of Justices Abhay S. Oka and Pankaj Mithal, emphasized the state government’s entitlement to rectify benefits granted under an order dated August 4, 2011. This order, issued by the Principal Secretary, deviated from the Finance Department’s directives and was inconsistent with the treatment of other government employees.

The court concurred with the High Court’s findings, refusing to intervene in their decision. It endorsed the state government’s October 27, 2014, recovery order, asserting that the benefits extended only to Ayurvedic and Unani Medical Officers, creating an unjustifiable discrepancy.

Background:

The appellant, a superannuated Medical Officer, argued that the State of Uttarakhand had withdrawn the personal/promotional pay scale benefit granted earlier. The dispute arose from conflicting government orders, including one from February 5, 1998, recognizing ad-hoc service but deferring personal pay benefits until regularization.

The Finance Department’s March 8, 2011, order outlined financial upgradations for all state service cadres, based on years of satisfactory service. However, the August 4, 2011, order specifically favored Ayurvedic Medical Officers, leading to its cancellation on May 29, 2014.

The state government, detecting a flaw in the order without Cabinet approval, decided to annul it on August 22, 2014. Subsequently, recovery orders were issued on October 27, 2014, prompting the appellants to challenge them in the High Court.

Court’s Observations:

The Supreme Court, addressing whether benefits could be recovered post-superannuation, highlighted the creation of a special class of Ayurvedic and Unani Medical Officers under the contentious August 4, 2011, order. It supported the state government’s decision to cancel the order, emphasizing the absence of a valid reason for preferential treatment.

The court referenced the appellant’s November 8, 2006, personal time-bound pay scale grant, subject to recovery if the government decided otherwise. It agreed with the High Court’s assessment that recovery wouldn’t be inequitable as Ayurvedic Medical Officers did not belong to a weaker section.

Conclusion:

The Supreme Court ultimately upheld the High Court’s decision, allowing the recovery of benefits per the October 27, 2014, order. While affirming the appellants’ entitlement to benefits under subsequent orders, the court emphasized the need for recovery in line with the 2014 order.

In the case of Dr. Balbir Singh Bhandari v. The State of Uttarakhand & Ors., the Appeals have been allowed, establishing a precedent for the rectification of erroneous benefits even post-retirement.