[Cites 3, Cited by 0]

Orissa High Court

Fr (An Appeal Under Article-4 Of The ... vs Akshaya Kumar Barik & on 19 January, 2026

Author: Chittaranjan Dash

Bench: Chittaranjan Dash

           IN THE HIGH COURT OF ORISSA AT CUTTACK
                             WA No. 1303 of 2025

FR   (An Appeal under Article-4 of the Orissa High Court Order, 1948,
     read with Clause-10 of the Letters Patent constituting the High Court
     of Judicature at Patna and Rule-6 of Chapter-III of the Rules of the
     Hon'ble High Court of Orissa, 1948 challenging the order dated
     29.10.2024 passed by the learned Single Judge in W.P.(C) No.28160
     of 2020)

     State of Odisha and Anr.        ....                    Appellants

                                          Mr. Saroj Kumar Jee, A.G.A.


                                 -versus-

     Akshaya Kumar Barik & ....                             Respondents
     others
                                        Mr. Atul Tripathy, Advocate

                         CORAM:
         THE HON'BLE MR. DIXIT KRISHNA SHRIPAD
        THE HON'BLE MR. JUSTICE CHITTARANJAN DASH

                       Date of Judgment: 19.01.2026

     Chittaranjan Dash, J.

1. This Writ Appeal is directed against the judgment

dated 29.10.2024 passed by the learned Single Judge in W.P.(C)

No.28160 of 2020, whereby the order of the District Audit

Officer, Local Fund Audit, Balasore, directing refixation of pay

of the writ petitioner after retirement, was quashed and

consequential directions were issued for

restoration/reimbursement of any reduction effected in

pensionary benefits. The Appellants-State have assailed the

said judgment contending, inter alia, that the learned Single

Judge failed to appreciate the statutory scheme governing

regularisation, pay fixation and applicability of the Odisha

Revised Scales of Pay Rules, and that the relief granted travels

beyond the permissible limits of judicial review.

2. Heard learned counsel for the Appellants and learned

counsel appearing for Respondents and have carefully

perused the materials available on record.

3. The delay of 175 days is condoned in I.A. No.2626 of

2025.

4. The undisputed factual matrix is that the Respondent

entered service as Work Sarkar in 1980 and was promoted on

ad hoc/officiating basis to the post of Junior Assistant in 1985

against an admitted vacancy. He continued to discharge duties

of the promotional post uninterruptedly for nearly three

decades. His service was ultimately regularised in 2014 with a

stipulation that the ad hoc period would count for pensionary

benefits but without financial benefit for the said period. He

retired in 2017. The controversy arose much after his

superannuation, when the pension proposal was scrutinised

and the District Audit Officer issued instructions in 2020 for

refixation of pay with retrospective effect, resulting in

reduction of pay and consequential impact on pensionary

benefits, without issuance of any show-cause notice or

affording opportunity of hearing.

5. The learned Single Judge, after considering the

materials on record and the settled legal position, quashed the

impugned audit instructions, primarily on the ground of

violation of principles of natural justice and impermissibility

of unilateral post-retiral interference with settled pay and

pensionary benefits. The direction issued was confined to

restoration or reimbursement, if any recovery or reduction had

already been effected.

6. Mr. Jee, learned Additional Government Advocate has

contended that under the ORSP Rules, 2008 and 2017, the

Respondent was not entitled to revised scales for the ad hoc

period; that the regularisation order of 2014 clearly barred

financial benefits prior thereto; and that the Single Judge erred

in applying the line of authorities relating to recovery from

retired employees.

7. At the outset, it is evident that the action impugned

before the writ court was not a mere arithmetical correction

but a substantive refixation of pay with civil consequences,

undertaken after retirement. Such an exercise, even if traceable

to statutory rules, could not have been undertaken without

complying with the minimum requirement of audi alteram

partem. The absence of any show-cause notice or opportunity

of hearing vitiates the decision-making process itself. The

learned Single Judge was, therefore, justified in holding the

impugned action to be procedurally unsustainable.

Secondly, while it is true that the regularisation order

restricted financial benefits for the ad hoc period, the

Respondent's pay had been continuously fixed, revised and

audited over the years under successive ORSP Rules by the

competent audit authority itself. The State permitted this

position to attain finality not only during service but also up to

the stage of retirement. The attempt to reopen and unsettle the

same after several years, particularly post superannuation,

cannot be viewed as a routine correction. In service

jurisprudence, such belated interference is frowned upon,

especially where the employee is not at fault and has merely

received what was sanctioned by the employer and audit

authorities themselves.

8. The reliance placed by the learned Single Judge on

decisions such as Syed Abdul Qadir, Rafiq Masih and allied

precedents cannot be said to be misplaced. Even assuming that

no actual recovery had yet been effected, the direction for

refixation itself, if implemented, would inevitably lead to

recovery or reduction of pension.

9. In the matter of State of Punjab & Ors vs. Rafiq Masih

(White Washer) etc., (2015) 4 SCC 334, the Hon'ble Supreme

Court has held as follows:

"7. Having examined a number of judgments rendered by this Court, we are of the view, that orders passed by the employer seeking recovery of monetary benefits wrongly extended to employees, can only be interfered with, in cases where such recovery would result in a hardship of a nature, which would far outweigh, the equitable balance of the employer's right to recover. In other words, interference would be called for, only in such cases where, it would be iniquitous to recover the payment made. In order to ascertain the parameters of the above consideration, and the test to be applied, reference needs to be made to situations when this Court exempted employees from such recovery, even in exercise of its jurisdiction under Article 142 of the Constitution of India. Repeated exercise of such power, "for doing complete justice in any cause" would establish that the recovery being effected was iniquitous, and therefore, arbitrary. And accordingly, the interference at the hands of this Court. ×××

10. In view of the afore-stated constitutional mandate, equity and good conscience, in the matter of livelihood of the people of this country, has to be the basis of all governmental actions. An action of the State, ordering a recovery from an employee, would be in order, so long as it is not rendered iniquitous to the extent, that

the action of recovery would be more unfair, more wrongful, more improper, and more unwarranted, than the corresponding right of the employer, to recover the amount. Or in other words, till such time as the recovery would have a harsh and arbitrary effect on the employee, it would be permissible in law. Orders passed in given situations repeatedly, even in exercise of the power vested in this Court under Article 142 of the Constitution of India, will disclose the parameters of the realm of an action of recovery (of an excess amount paid to an employee) which would breach the obligations of the State, to citizens of this country, and render the action arbitrary, and therefore violative of the mandate contained in Article 14 of the Constitution of India."

10. It is also significant to note that the learned Single

Judge did not grant any positive declaration of entitlement

contrary to the statutory rules, nor did the Court direct grant

of financial benefits for the ad hoc period as a matter of right.

The relief granted is narrowly tailored to setting aside a

procedurally flawed and inequitable post-retiral action and to

restoring the position as it stood prior thereto. The writ court

was well within its jurisdiction to interdict such action at the

threshold, having regard to the settled law that recovery from

retired employees, in the absence of misrepresentation or

fraud, causes undue hardship and is impermissible in equity.

11. In the totality of circumstances, this Court finds no