Paid By Mistake; They Had Given Undertakings: Supreme Court Dismisses Appeals By NIT Teachers Against Recovery
The Supreme Court has dismissed a batch of appeals filed by teachers of the National Institute of Technology (NIT), Calicut, challenging the recovery of Academic Grade Pay benefits that had been mistakenly extended to them.
A Bench of Justices Dipankar Datta and Sheel Nagu held that the recovery was justified because the teachers had given written undertakings agreeing to refund any amount found to have been wrongly paid following an erroneous pay fixation.
The judgment was delivered in Dr. M.K. Ravi Varma and Others v. National Institute of Technology and Others on September 23, 2026.
The dispute concerned Lecturers and Assistant Professors who were granted financial benefits arising from Academic Grade Pay around October 2009. The benefits were subsequently withdrawn in January 2010 after the authorities found that the teachers had not completed the requisite period of service.
The teachers challenged the withdrawal and recovery before the Kerala High Court. A Single Judge initially ruled in their favour in November 2014.
The NIT challenged that decision before a Division Bench, which reversed the Single Judge’s ruling in November 2015. The teachers then approached the Supreme Court.
Before the Supreme Court, the teachers argued that the payments had been made without any fraud, misrepresentation or fault on their part. They relied particularly on the Supreme Court’s earlier ruling in State of Punjab v. Rafiq Masih, which recognises circumstances in which recovery of excess payments from employees may be impermissible.
The Supreme Court, however, said that Rafiq Masih could not be considered in isolation from the earlier legal position concerning recovery of payments made by mistake.
The Bench referred to the principle laid down in Chandi Prasad Uniyal v. State of Uttarakhand, under which the absence of fraud or misrepresentation by an employee does not, by itself, prevent recovery of money that was paid without legal authority.
The Court also relied upon the principle recognised in High Court of Punjab & Haryana v. Jagdev Singh. In that case, the Supreme Court had held that protection against recovery cannot be invoked in the same manner when an employee had been placed on notice that excess payment would have to be refunded and had furnished an undertaking to that effect.
In the NIT teachers’ case, the institution had produced an undertaking given by the appellants. The undertaking recorded their willingness to permit recovery if their pay fixation was subsequently found to be erroneous.
The Supreme Court found this undertaking to be crucial. The Bench observed that a mistake had occurred when the financial benefits were extended and that the mistake was detected and the benefits withdrawn relatively soon thereafter.
The Court therefore concluded that recovery of the amounts paid by mistake, particularly in view of the undertakings furnished by the teachers, did not warrant interference with the Kerala High Court Division Bench’s decision.
The teachers had also relied on a communication issued by the Ministry of Human Resource Development in March 2013, which stated that benefits already given to academic staff of NITs should not be recovered.
The Supreme Court rejected reliance on that communication in the circumstances of the case. The Court noted that the recovery from the appellants had already taken place two years before they instituted their writ proceedings before the High Court.
The Bench also considered the argument that recovering the amounts would cause hardship. It clarified that hardship cannot simply be presumed whenever an employee is asked to return excess payments.
According to the Court, hardship has to be established on the facts of the particular case. It gave examples of situations in which judicial intervention could potentially be justified, such as where an employee establishes that the excess amount had been entirely spent on medical treatment and repayment would cause immense hardship.
In the present case, however, the teachers had not pleaded such hardship before the writ court. The Supreme Court therefore found no basis to interfere with the recovery.
The Court also noted that the appellants had not asserted that they were legally entitled, as a matter of right, to the Academic Grade Pay benefits that had been granted to them.
The ruling reinforces an important distinction in cases involving recovery of excess salary or service benefits. An employee may not always be protected merely because the excess payment resulted from an administrative mistake and was received without fraud or misrepresentation.
Where an employee has expressly undertaken to refund amounts arising from an erroneous pay fixation, that undertaking can become a significant factor in determining whether recovery is legally permissible.
The Supreme Court ultimately found the appeals without merit and dismissed them. The parties were directed to bear their own costs.
The judgment leaves intact the Kerala High Court Division Bench’s decision permitting the NIT to correct the erroneous pay fixation and recover the excess financial benefits paid to the teachers.
