JUDGMENT : 1. By way of this petition under Article 226 of the Constitution of India, the petitioner-Association has made the following prayers : “(A) By a writ of mandamus and/or in the nature of mandamus and/or by any other writ, order of direction, the respondents herein be directed to give the higher pay-scale of 1320-2040 to the persons who have completed nine years of service either in the cadre of Clerk or in the cadre of Surveyor irrespective of the fact whether they were employed before 1st of April, 1977 or after 1st of April, 1977; (B) That, by a writ of mandamus and/or in the nature of mandamus and/or by any other writ, order or direction, the respondents herein be directed to give the higher pay-scale of 1320-2040 to the persons who were employed in the common cadre of Clerk Surveyor prior to 1st of April, 1977 irrespective of fact whether they were treated as Clerks or Surveyors after 1st of April, 1977. (C) That, by a writ of mandamus and/or in the nature of mandamus and/or by any other writ order or direction, it be declared that the circular Annexure-C (Coll.) issued by the Superintendent of the Land Records and other Offices to reduce the higher pay-scale of all Clerks and Surveyors from 1320-2040 to 1200-2040 is illegal, ultra vires and bad in law. (D) That, by a writ of mandamus and/or in the nature of mandamus and/or by any other writ, direction or order, it be directed that in view of the Government Resolution dated 27th of March, 1980, Annexure E to the petition, the post of Senior Clerk should be converted into Shirastedar in all the offices under the Administrative Control of Settlement Commissioner and Director of Land Record w.e.f. 27th March, 1980. (E) That, pending hearing and final disposal of this writ petition, the respondents herein be directed not to reduce the pay-scale of persons and/or employees who are the members of the petitioners association and who are given higher pay-scale of 1320-2040 by the subsequent order passed by the head of the department and be further restrained from effecting recovery of the pay already given. (E) That, any other and further relief that the circumstances of the case may require be granted. (F) That, the costs of this petition be provided for.” 2. (E) That, any other and further relief that the circumstances of the case may require be granted. (F) That, the costs of this petition be provided for.” 2. At the very outset, Mrs.Ketty A. Mehta, learned advocate for the petitioners submits that she does not press the substantive prayers made at paragraphs 15(A) and 15(D), but is only praying for the adjudication of the prayers at paragraphs 15(B) and 15(C). 3. Briefly stated, the relevant facts of the case are that petitioner No.1 is an Association of Land Record Class-III employees, recognized by Resolution No.RAV/109 dated 23.10.1959. The petitioner-Association was recognized as a registered association by the then State of Bombay and the same position continued after the formation of the State of Gujarat. Petitioner No.2 is the General Secretary of petitioner No.1 Association. The grievance of the petitioners is that the respondent-State of Gujarat has, vide the impugned Circulars dated 26.04.1995 and 20.07.1996, annexed as Annexure-C (Collectively) reduced the pay-scale of persons who were employed in the common cadre of Clerk-cum-Surveyor, prior to 01.04.1977 and has directed recovery to be effected from them, with retrospective effect. It is the case of the petitioners that prior to 01.04.1977, there was a cadre of Clerk-cum-Surveyor (Class-III) in the pay-scale of Rs.1200-2040. The employees belonging to this cadre were posted as either Clerk, or Surveyor, in the same pay-scale. The promotional post for Clerk-cum-Surveyor was Senior Clerk-cum-Maintenance Surveyor, in the pay-scale of Rs.1320-2040. Therefore, prior to 01.04.1977, irrespective of the fact whether the employee was posted as a Clerk or a Surveyor, the pay-scale received was the same and the promotional avenue on the post of Senior Clerk-cum-Maintenance Surveyor with the higher pay-scale was the same. There was a bifurcation in the cadre after 01.04.1977 and the employees were asked to exercise the option whether they would like to remain as Clerks or Surveyors. After the bifurcation of the cadre, there were separate promotional posts for Clerks and Surveyors, namely, Senior Clerk and Maintenance Surveyor, respectively. Prior to the bifurcation, Clerks who had put in nine years' service were placed in the higher pay-scale of Senior Clerk-cum-Maintenance Surveyor. After the bifurcation of the cadre, there were separate promotional posts for Clerks and Surveyors, namely, Senior Clerk and Maintenance Surveyor, respectively. Prior to the bifurcation, Clerks who had put in nine years' service were placed in the higher pay-scale of Senior Clerk-cum-Maintenance Surveyor. The case of the petitioners is that the members of petitioner No.1 Association, who are Clerks, are aggrieved by the action of the State Government in placing them in a reduced pay-scale with retrospective effect and subjecting them to a recovery of differential salary, in spite of the fact that they were given the higher pay-scale of Senior Clerk-cum-Maintenance Surveyor as they were working prior to 01.04.1977. Certain prayers, as indicated earlier, have been given up by the petitioners, therefore, this Court would confine its adjudication to the grievance initially expressed by the petitioners regarding their eligibility to receive the higher pay-scale after nine years' service in the common cadre, before the bifurcation of the cadre. 4. Mrs.Ketty A. Mehta, learned advocate for the petitioners has submitted that the action of the respondents in reducing the pay-scale granted to Clerks pursuant to a decision of the State Government to grant them the higher pay-scale after the completion of nine years service in the common cadre and directing recovery to be made from them is contrary to the provisions of Rule 57-A(ii) of the Bombay Civil Services Rules, 1959 (“BCSR”, for short). It is submitted that the said Rule mandates that when any rule or order regulating pay is made with retrospective effect, the pay of the affected Government Servant shall be fixed notionally, but the Government Servant concerned shall not be called upon to refund the resultant amount of overpayment on account of pay and allowances. 4.1 It is next submitted that it is now a settled position of law that when the excess amount has not been paid on account of any misrepresentation or fraud on the part of an employee or has been made by applying a wrong principle for calculating the pay and allowances on the basis of a particular interpretation of a rule subsequently found to be erroneous, the recovery of such amount is prohibited. It is submitted that in the present case, there was no misrepresentation or fraud on the part of the members of the petitioner-Association. It is submitted that in the present case, there was no misrepresentation or fraud on the part of the members of the petitioner-Association. Neither was there any mistake on the part of the State Government in applying any rule or order. 4.2 In support of the above submissions, reliance has been placed upon a judgment of the Supreme Court in the case of Syed Abdul Qadir and others Vs. State of Bihar and others, reported in (2009) 3 SCC 475 . 4.3 The third contention raised by the learned advocate for the petitioners is that the decision of the Committee on the basis of which the impugned Circulars have been passed, is contrary to the Circular dated 01.12.1987. The recovery has been made on the basis of a decision taken by a Committee, which has sought to override the policy decision of the State Government contained in the Circular dated 01.12.1987, whereby it was decided that the cadre of Clerk-cum-Surveyor, being an interchangeable one, would be eligible to be granted the higher pay-scale of Senior Clerk-cum-Maintenance Surveyor after the completion of nine years of service. 4.4 Lastly, it is submitted that before withdrawing the higher pay-scale granted to the Clerks and directing recovery to be made, no notice was given to the affected employees and no opportunity of hearing was granted to them. Hence, the decision of the State Government is bad, on this count as well, being in violation of the principles of natural justice. 5. Mr.Janak Raval, learned Assistant Government Pleader has supported the impugned decision of the State Government by submitting that after 01.04.1977, there was a bifurcation in the common cadre of Clerk-cum-Surveyor. The employees who opted for the post of Clerks were given the promotional avenue of Senior Clerks and those who opted for the post of Surveyors were given the promotional avenue of Maintenance Surveyors. As the petitioners have opted for the post of Clerks, they would be eligible to receive the pay-scale of Senior Clerk which is Rs.1200-2040. Hence, the State Government is right in its decision to direct recovery of the excess payment to be made from the petitioners as they would no longer be eligible to receive the pay-scale of Rs.1320-2040. On the basis of the above submissions, the learned Assistant Government Pleader has urged that the petition be rejected. 6. Hence, the State Government is right in its decision to direct recovery of the excess payment to be made from the petitioners as they would no longer be eligible to receive the pay-scale of Rs.1320-2040. On the basis of the above submissions, the learned Assistant Government Pleader has urged that the petition be rejected. 6. This Court has heard learned counsel for the respective parties, perused the averments made in the petition, contents of the documents annexed thereto and the contents of the affidavit-in-reply. 7. It is not disputed that the case of the petitioners would be governed by the Bombay Civil Service Rules, 1959. Rule 57-A is relevant and is reproduced hereinbelow : “57A (i) Notwithstanding the provisions contained in these rules, the pay of a Government Servant whose promotion or appointment to a post is found to be or to have been erroneous on the basis of facts, e.g. incorrect seniority, failure to apply any relevant rules or orders correctly, shall be regulated in accordance with any general or special orders issued by the Government in this behalf. (ii) When any rule or order regulating pay is made with retrospective effect, the pay of a Government Servant affected by such order or rule, shall be fixed notionally as if the rule, order were applicable in his case but the Government Servant concerned shall not be called upon to refund the resultant amount of overpayment on account of pay and allowances.” (emphasis supplied) 8. Sub-Rule 57A(ii) is relevant for the purpose of the present petition. As per this rule, no recovery or refund can be made from a Government Servant of the amount of over payment on account of pay and allowances, with retrospective effect. 9. If the impugned Circulars dated 26.04.1995 and 20.07.1996 are perused, it is clear that the recovery sought to be made from the members of the petitioner-Association is with retrospective effect, from the date they completed nine years of service in the common cadre of Clerk-cum-Surveyor and were granted the higher pay-scale of Senior Clerk-cum-Maintenance Surveyor, that is, Rs.1320-2040. The pay-scale of the petitioners is now sought to be reduced to Rs.1200-2040. The benefit of the higher pay-scale of Rs.1320-2040 has been given to the members of the petitioner-Association prior to the issuance of the impugned Circulars in the year 1995 and 1996. The pay-scale of the petitioners is now sought to be reduced to Rs.1200-2040. The benefit of the higher pay-scale of Rs.1320-2040 has been given to the members of the petitioner-Association prior to the issuance of the impugned Circulars in the year 1995 and 1996. Hence, the recovery sought to be made from them is retrospective in nature and thus, is contrary to the provisions of Rule 57A(ii) of the BCSR. There is no answer to this contention from the State Government, either in the reply or in the oral submissions advanced before this Court. 10. Learned advocate for the petitioners has placed reliance upon the judgment of the Supreme Court in Syed Abdul Qadir and others Vs. State of Bihar and others (Supra.). The relevant paragraphs of the said judgment are reproduced hereinbelow : “57. 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. 58. 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 v. State of Haryana, Shyam Babu Verma v. Union of India, Union of India v. M. Bhaskar, V.Gangaram v. Director, Col. B.J.Akkara (Retd.) v. Govt. of India, Purshottam Lal Das v. State of Bihar, Punjab National Bank v. Manjeet Singh and Bihar SEB v. Bijay Bhadur. 59. See Sahib Ram v. State of Haryana, Shyam Babu Verma v. Union of India, Union of India v. M. Bhaskar, V.Gangaram v. Director, Col. B.J.Akkara (Retd.) v. Govt. of India, Purshottam Lal Das v. State of Bihar, Punjab National Bank v. Manjeet Singh and Bihar SEB v. Bijay Bhadur. 59. Undoubtedly, the excess amount that has been paid to the appellant 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 appellant 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 appellant teachers, we are of the view that no recovery of the amount that has been paid in excess to the appellant teachers should be made.” 11. As has been held by the Supreme Court, it is now a settled position of law that recovery of the excess payment made by an employer to the employee cannot be made unless fraud is played by the employee or a misrepresentation is made, leading to the grant of a higher pay-scale. It is not the case of the respondent-State Government that in the present case, the members of the petitioner-Association played any fraud or made a misrepresentation, which has resulted in the grant of a higher pay-scale. On the contrary, a conscious and informed decision, in the nature of policy decision, was made by the State Government, as is clearly reflected in the Circular dated 01.12.1987. On the contrary, a conscious and informed decision, in the nature of policy decision, was made by the State Government, as is clearly reflected in the Circular dated 01.12.1987. It is categorically stated in this Circular, that those persons who are working in the common, interchangeable cadre of Clerk-cum-Surveyor prior to 01.04.1977, would be eligible for the grant of higher pay-scale in the cadre of Senior Clerk-cum-Maintenance Surveyor which was the promotional post that existed prior to, and upto, 01.04.1977. This benefit was granted on account of the completion of nine years' of service in the cadre of Clerk-cum-Surveyor. The reason for the grant of higher pay-scale, which is the completion of nine years of service, still exists as of today. After the bifurcation of the cadre post 01.04.1977, the said years of service rendered by the members of the petitioner-Association cannot be washed away or written off retrospectively, and the benefits accrued on the basis of the years of service put in by them cannot be nullified in the manner that is sought to be done by the State Government. 12. The Supreme Court and other Courts have exercised judicial discretion in a catena of cases in such situations, in order to protect the adversely affected employees from the hardships that they would incur due to the recovery of the higher pay-scale granted to them earlier. This principle of law, which has been expounded by the Supreme Court in Syed Abdul Qadir and others Vs. State of Bihar and others (Supra.), clearly applies to the facts of the present case. 13. Another glaring aspect of the matter is that the benefit of the higher pay-scale was granted to the members of the petitioner-Association pursuant to a decision of the State Government, flowing from the completion of nine years of service in the common cadre of Clerk-cum-Surveyor. This decision has not been withdrawn by the State Government but is sought to be deviated from, on the basis of a decision of a Committee which met on 19.04.1995, as is clear from the impugned Circular dated 26.04.1995. The date of the meeting of the Committee has been converted into a cutoff date for the withdrawal of the higher pay-Page scale and recovery, without any rational basis or nexus. The date of the meeting of the Committee has been converted into a cutoff date for the withdrawal of the higher pay-Page scale and recovery, without any rational basis or nexus. In the view of this Court, the decision of a Committee cannot override a decision of the State Government in granting a particular benefit to its employees on the completion of nine years' of service in the cadre, and that too, with retrospective effect. Nine years of service cannot be set at naught in this manner. Moreover, the impugned Circulars dated 26.04.1995 and 20.07.1996, do not address the aspect of the completion of nine years of service, which was the criteria for granting the benefit of higher pay-scale, in the first place. In this view of the matter, as well, this Court is of the view that the impugned Circulars are unsustainable in law. 14. It is not in dispute that before taking a decision to withdraw the higher pay-scale with retrospective effect granted to the members of the petitioner-Association and ordering recovery of the excess amount, no notices were issued to the affected employees. No opportunity of hearing was granted to them. It is now trite law that a decision which adversely affects the employee, especially having financial implications, calls for the grant of an opportunity of hearing to the affected party. As the members of the petitioner-Association were not heard and the impugned decision was taken behind their backs, the action of the respondents falls foul of the settled principles of law on this count, as the principles of natural justice have clearly been violated. 15. In a recent judgment in the case of State of Punjab and others Vs. Rafiq Masih (White Washer) and others, reported in (2015) 4 SCC 334 , the Supreme Court has laid down the following principles of law : “18. It is not possible to postulate all situations of hardship which would govern employees on the issue of recovery, where payments have mistakenly been made by the employer, in excess of their entitlement. Be that as it may, based on the decisions referred to hereinabove, we may, as a ready reference, summarise the following few situations, wherein recoveries by the employers, would be impermissible in law: (i) Recovery from the employees belonging to Class-III and Class-IV service (or Group C and Group D service). Be that as it may, based on the decisions referred to hereinabove, we may, as a ready reference, summarise the following few situations, wherein recoveries by the employers, would be impermissible in law: (i) Recovery from the employees belonging to Class-III and Class-IV service (or Group C and Group D service). (ii) Recovery from the retired employees, or employees who are due to retire within one year, of the order of recovery. (iii) Recovery from the employees, when the excess payment has been made for a period in excess of five years, before the order of recovery is issued. (iv) Recovery in cases where an employee has wrongfully been required to discharge duties of a higher post, and has been paid accordingly, even though he should have rightfully been required to work against an inferior post. (v) In any other case, where the Court arrives at the conclusion, that recovery if made from the employee, would be iniquitous or harsh or arbitrary to such an extent, as would far outweigh the equitable balance of the employer's right to recover.” 16. The petitioners, being Class-III employees, are covered by paragraph 18(i) of the said decision. 17. Examining the case from all angles, this Court is of the view that the decision of the State Government in reducing the pay-scale of the petitioners and ordering the consequential recovery with retrospective effect is not only unjust, but is unlawful, as well. 18. For the aforestated reasons, the following order is passed : The impugned Circulars of the State Government dated 26.04.1995 and 20.07.1996 (Annexure-C) (Collectively) are quashed set aside. The respondents are directed not to withdraw the higher pay-scale given to the petitioners or effect any recovery from them. 19. The petition is allowed. Rule is made absolute, accordingly.