State Can't Recover Overpaid Salaries After 5 Yrs, In Absence Of Misrepresentation From Workers: HP High Court Aids Class-III Workers

The Himachal Pradesh High Court dismissed 36 LPAs filed by the state, holding that the recovery of overpaid salaries after 5 years cannot be made from class-III workers, when there was no misrepresentation on the part of the workers.

Upholding the finding of the Single bench, Justice G.S. Sandhawalia & Justice Ranjan Sharma held that: “since the petitioners are Class-III employees and the recovery sought to be effected, pertains to the amount erroneously paid to them more than five years ago, the same is impermissible in law.”

The State of Himachal Pradesh had filed 36 Letter Patent Appeals against a common judgment which directed the state to not make any recovery from class-III employees based on the revised pay scale.

The State contended that the pay of health workers in district Shimla had been wrongly fixed at ₹1410/- instead of ₹1365/- with effect from 01.01.1993. It submitted that this discrepancy caused anomaly in the entire cadre and caused financial loss to the State Exchequer.

Thereafter, the Chief Medical Officer Shimla, directed all the Block Medical Officer/Senior Medical Officer of District Shimla, to revise the pay fixation of health workers in District Shimla and initiate recovery proceedings.

Aggrieved by the decision of the Chief Medical Officer, the workers filed writ petitions before the High Court. The High Court upheld the writ petitions and allowed the state to re-fix the pay, but it denied to make any recovery of the pay from the employees. It also directed the state to payback the amount, if it had already been recovered.

Challenging, the Single judge's order the State filed letter patent appeals.

The Court observed that even though there was a proposal, and it had been directed by the Chief Medical Officer to propose the revised pay fixation, but no notice was issued to the employees prior to the said action being taken.

Further, the Court noted that the re-fixation order came after more than five years of continued payment, and no notice was served before the recovery, violating principles of natural justice.

Thus, the Court dismissed the LPA's filed by the state, holding that the judgment passed by Single Judge did not suffer from any illegality or infirmity. The Court held that there was no misrepresentation on the part of employees, but a violation of the principles of natural justice by the State.

Case Name: State of H.P. V/s Nitya Nand & Ors.

Case No.: LPA No. 457 of 2025 alongwith connected matters

Date of Decision: 24.07.2025

For the appellant(s): Mr. Pranay Pratap Singh, Additional Advocate General.

For the respondents: Mr. Prem Prakash Chauhan, Advocate through video conferencing with Mr. Karan Sharma, Advocate in CMP.M No.2026 of 2024 & LPA No.457 of 2025

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