Restitution after reversal of court order permits recovery of excess payments from employees; mistaken-payment bar does not apply.

Excess payments made under a judicial order later set aside were recoverable under the principle of restitution, because the employees could not retain benefits received on the basis of an order that no longer survived. The bar against recovery from Class III and Class IV employees in cases of mistaken payment was held inapplicable on these facts, since the payment was not an independent administrative mistake but flowed from the earlier court order. Section 144 of the Code of Civil Procedure, 1908 supported restoration of the parties to the position they would have occupied absent that order, and recovery of the excess amount was upheld.

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Issues: Whether excess amount paid to the employees pursuant to a judicial order later set aside could be recovered by the State, and whether such recovery was barred by the rule against recovery from Class III and Class IV employees.

Analysis: The amount was not paid by mistake by the State but pursuant to an order of the Single Judge, which was subsequently set aside by the Division Bench. In such a situation, the employees could not retain the benefit of sums received under the earlier order, because on reversal of that order the parties must be restored, as far as possible, to the position they would have occupied but for the order. The rule against recovery in cases of mistaken payment to lower-paid employees was held inapplicable on these facts. Section 144 of the Code of Civil Procedure, 1908 and the broader principle of restitution supported recovery of the excess amount.

Conclusion: Recovery by the State was permissible. The employees were held liable to refund the excess amount, with recovery directed in thirty-six equal monthly instalments.

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