REPORTABLE IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 3351-3354 OF 2003

Syed Abdul Qadir  & Ors.                 …..  Appellants

Vs.

State of Bihar & Ors.                   …..  Respondents

WITH

CIVIL APPEAL NO. 3355 of 2003

&  

CIVIL APPEAL NO.3364 OF 2003  

J U D G M E N T

B.N. AGRAWAL,J.

1. These appeals by special leave are directed against the common judgment of

Patna High Court  whereby a Division Bench of that  Court  dismissed letters patent

appeals preferred by the appellants herein  against that part of 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 fixation

of  pay scale on promotion of  Assistant Teachers of the Government taken over

Schools  [the  Nationalised  Schools]   in  the  State  of  Bihar shall  be  governed by

Fundamental Rule 22(1)(a)(2) [FR.22(I)(a)(2)] instead of Fundamental Rule 22-C

[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 would apply prospectively and not retrospectively  and that recovery of

the amount  paid in excess in breach of FR.22(I)(a)(2)  from the appellants was not

to  be made.   While setting aside the judgment of  the learned Single Judge and

holding that, since Office Order dated 16.11.2000 only 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 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 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,  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. 12/B 8-760/75-398

dated  9th June,  1983   framed  Bihar  Nationalised  Secondary  School  [Service

Condition] Rules, 1983 [hereinafter referred to as `the 1983 Rules’] and  under rule

3 of the 1983 Rules, 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 Grade] to  the post  of  Assistant Teacher [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 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 remove

anomaly in the pay scales of teachers of the Nationalised Schools in  the State of

Bihar  and  in  terms  of  Bipartite  Agreement  entered  into  between  the  State

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 on the recommendations of the

4th Pay  Revision  Committee  appointed  by  the  State  Government,  which

recommendations 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 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 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.  However, those teachers who got promotion or time

bound promotion into the junior selection grade but  had not completed 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 1.1.1986 and they were to be extended the benefit of

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 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 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,  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 FR.22-C and

in its place inserted FR.22(I)(a)(1) and 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

extended the revised senior scale 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 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 Government of  Bihar,  vide Notification dated  24.6.1993,  reiterated that pay

fixation of  teachers shall be made as per FR.22-C.  Upon objection by the Audit

Team of  the Office of  the  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-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,

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 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 petitioners made prior to the said

Resolution.  Aggrieved, the State of Bihar challenged 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 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 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 the Accountant General to inform him about any decision of the State

Government with regard to the applicability of amended provision regarding fixation

of pay  on promotion to the higher scale.   The Accountant General in turn wrote to

the Finance Department, Govt. of Bihar, in this regard.  

6. On coming to know of the instances of pay on 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 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(I)(a)(2) and recover the

excess payment made from the date of initial fixation of pay 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.   

7. Aggrieved  by  the  said  Office  Order,  the  appellants  herein  and  others

similarly situated, filed  Writ Petitions before 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 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 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  and  not  retrospectively  and  against  the

direction for no recovery of  amount paid in excess, the appellants herein and others

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 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(I)(a)(2)  and not according

to FR.22-C,  directing  the State Government  to recover the amount paid in excess

in reasonable 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 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.  

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 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 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 learned counsel is that since Office Order

dated 16.11.2000 provided for fixation of pay of the appellants – teachers in terms of

the amended provision i.e., FR.22(I)(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

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 of  the High

Court and the State of Bihar having not challenged the said decision before this

Court,  the question of   making the Office Order effective from a date prior to

20.2.1993  does not arise.  It has also been submitted that 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 not be recovered; it having been paid without any misrepresentation or fraud

on the part of the appellants herein.   

11. Per contra, Shri Rakesh Dwivedi, learned senior 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(I)(a)(1) and FR.22(I)(a)(2), was

not  adopted  and was  only 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,

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 importance.  It is further

submitted that as the question whether FR.22-C or its amended provision would

apply in the case on hand was not the subject matter of the decision rendered in

CWJC No.  2405 of  1997,  it  having 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.  

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(I)(a)(1)  and  FR.22(I)(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:-

“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 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:-

(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 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 have their pay fixed in the revised senior

scale indicated in Schedule II.   Those teachers  who were in

receipt of promotion – time bound promotion into the junior

selection  grade  prior  to  1st  January,  1986  but  had  not

completed 12 years of service in the 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

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 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 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  bound  promotion  on  completion  of  25

years of 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 revised scale.  

(v) Benefit of  selection scale in the revised scale of pay shall be

extended to teachers in accordance with availability of post and

the  procedure  and  conditions  prescribed  by  the  Central

Government 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  promotion  will

cease to be applicable to teachers in the revised pay scales with

effect from 1st January, 1986.  In their case the pay fixation on

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  time.    The  fixation  of  pay  on

promotion  referred to in sub-paragraphs  (ii),  (iii),  (iv)  & (v)

shall also be governed by those 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 promotion in respect of different classes of

teachers mentioned  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.  

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-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  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

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 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 old post, or for period

after 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 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 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

according to which, he will draw as initial pay the stage of the 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 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 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  by  FR.22(I)(a)(1)  and  FR.22(I)(a)(2),  read

thus:-

“F.R.22-C.-  Notwithstanding  anything  contained  in  these  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 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 of the lower post by one increment at the stage at which such pay has

accrued:

Provided that the provisions of this rule shall not 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.”  

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 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(I)(a)(1) and

FR.22(I)(a)(2), relevant portions of   which are quoted hereinbelow:-

“FR.22(I).-   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  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 another 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 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 pay has accrued or rupees one hundred only whichever is more.”

“FR.22(I)(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

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(I)(a)(1) provides that when a  government 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 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 pay has accrued or

rupees one hundred only whichever is more.  According to FR.22(I)(a(2), the benefit

of an additional increment, which is available to a government servant  under FR.22

(I)(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 the incumbent on

promotion  or  appointment  to  a  higher  post  has  to  discharge  the  duties  and

responsibilities of  greater importance. Therefore, in cases where on promotion or

appointment to the higher post no duties and responsibilities of greater importance -

than those being discharged in the post held by the incumbent regularly prior to the

promotion -  were to  be  discharged by the government servant,  the  pay fixation

formula  is  provided  for  under  FR.22(I)(a)(2)  according  to  which  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(I)(a)(1)  and FR.22(I)(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

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 appellants is that it is FR. 22-C

which is applicable to the case of the appellants herein and not FR.22(I)(a)(1) or

FR.22(I)(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

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 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 unaware of the fact that FR.22-C had

already been substituted and in place thereof FR.22(I)(a)(1) and FR.22(I)(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.   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 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  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 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 is provided

under 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 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(I)(a)(1) and FR.22(I)(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 governed by FR.22(I)(a)(2) and not by FR.22(I)(a)(1).

23. Since, having regard to the provisions of Clause 13 of the Resolution,  we

have held that appellants – teachers on their promotion to the higher post/grade

would be governed by  the amended provisions of FR.22-C, i.e., FR.22(I)(a)(1)  and

FR.22(I)(a)(2)  we need not go into the submission made by the learned counsel

appearing on behalf  of the appellants that 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 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(I)(a)(2), should be

applied prospectively and not retrospectively. Alternative submission in this regard

is  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-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

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 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 be

decided.   Ordinarily, we would have 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 which

the amended provisions of FR.22-C were notified.  But,  in the peculiar facts and

circumstances  of  this  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  challenging

judgment  of  the  learned 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, we hold that FR.22(I)(a)

(2) shall apply to the  teachers of Secondary Schools also w.e.f. 20.2.1993.  

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 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  not  be  recovered;  it  having  been  paid  without  any

misrepresentation or fraud on their part.  

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 which has created all the chaos in the case

on hand.  Further, until January 1999, the officials of the Education Department 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  Secondary  Education,  who  is  the  head  of  the  Department  of  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  Government of Bihar was in

favour of making the amended 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 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 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 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 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 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

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 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 and circumstances of any particular case, order for recovery of the amount

paid in excess.    See  Sahib Ram vs.     State of Haryana  ,  1995 Supp. (1) SCC 18,

Shyam Babu Verma   vs.   Union of India  ,     [1994] 2 SCC 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;

Purshottam  Lal  Das  & Ors  .,     vs.  State  of  Bihar,  [2006]  11  SCC  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  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.  It would not be out of place to mention here

that the Finance Department had, in its counter affidavit, admitted that it was a

bona fide mistake 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 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 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 had already been recovered from some of the teachers.   Since

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.  

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  appellants  –  teachers  is  set  aside  and that  part  of  the  impugned

judgment  whereby  it  has  been  held  by  the  Division  Bench  that  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,  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 copy of this judgment.       

…………………..J. [B.N. AGRAWAL]

…………………………J. [HARJIT SINGH BEDI]

…………………J. [G.S. SINGHVI]

NEW DELHI, DECEMBER 16, 2008.