Tribunal's re-fixation of pay and recovery orders set aside as court holds deputation pay governed by parent department scale and central allowances, overruling alleged employee option to switch pay scales
In a significant judgment delivered on August 14, 2026, the Kerala High Court (Division Bench) clarified the legal principles governing pay fixation of employees on deputation, emphasizing strict adherence to deputation notifications and relevant government orders. The court ruled in favor of Arjun Ambalapatta, a former Assistant Public Prosecutor for the State of Kerala, who challenged the demand for recovery of alleged excess pay during his deputation to the National Investigation Agency (NIA).
The petitioner had joined NIA on deputation in 2011, responding to a notification dated July 5, 2010, which explicitly stated that deputationists would continue to draw their basic pay from their parent department, supplemented by allowances admissible to Central Government employees. Accordingly, his pay was fixed at Rs. 21,240, reflecting his State Scale basic pay plus a notional increment. However, several years after his deputation ended in 2014, the NIA issued orders refixing his pay at a lower Central Scale of Rs. 15,600, alleging that he had exercised an option to switch pay scales. Subsequently, demands were raised seeking recovery of the excess amount paid during the deputation period.
The petitioner contested these orders before the Central Administrative Tribunal (CAT), Kochi Bench, which rejected his application but directed the authorities to re-fix his pay after providing a hearing. Aggrieved, he approached the Kerala High Court.
The court held that the deputation notification and the Ministry of Personnel's Office Memorandum clearly mandated that deputationists continue to draw basic pay from their parent department with applicable increments and allowances. This principle supersedes any subsequent options allegedly exercised by the employee to change pay scales. The court found no merit in the respondents' reliance on the petitioner's option to switch to the Central Scale, especially since the notification's terms were unambiguous and binding.
Further, the court criticized the delay in initiating re-fixation and recovery proceedings only after the deputation period had ended, noting the lack of explanation for such procedural lapses. Given these findings, the court set aside the re-fixation orders and quashed the recovery demands, ruling that no recovery could be pursued from the petitioner.
This judgment reinforces the principle that pay fixation and allowances for employees on deputation must strictly conform to the deputation notification and relevant government orders, ensuring protection of employees from arbitrary retrospective pay adjustments and unjust demands.
Bottom Line:
Deputation - Fixation of pay and allowances for an employee on deputation must adhere to the terms of the deputation notification and relevant government orders, irrespective of alleged options exercised by the employee at a later stage.
Statutory provision(s): None specifically cited; reliance on deputation notification (Annexure A3), Ministry of Personnel Office Memorandum (Annexure A9), and Central Administrative Tribunal orders.
Arjun Ambalapatta v. Union of India, (Kerala)(DB) : Law Finder Doc Id # 2971262
